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LIBRARY 

OF  THE 

UNIVERSITY  OF  CALIFORNIA. 

Class 


GREAT    FORTUNES 

THE    WINNING:    THE    USING 

BY 
JEREMIAH  W.  JENKS,  PH.  D.,  LL.  D. 

Professor  of  Political  Economy  and  Politics,  Cornell  University 

Author  of  The  Trust  Problem,  Citizenship  and  the 

Schools,  Considerations  on  A  Monetary 

System  for  China,  etc. 


* 


NEW  YORK 

McCLURE,  PHILLIPS  &  CO. 
MCMVI 


4 

GENERM 


Copyright,  1906,  by 
McCLURE,   PHILLIPS  &  CO. 

Published,  November,  1906,  N 


To 
My  Brothers 

To  whom  I  Owe  in  Good  Part  my  Views  on  what  is 
Right  in  Business 


PREFACE 

The  substance  of  this  book  was  given  in 
lectures  on  the  Adin  Ballon  foundation 
at  Meadville,  Pennsylvania,  and  the  main 
thoughts  have  since  been  condensed  into 
a  single  lecture  at  different  times  and 
places.  Some  of  the  auditors  have  kindly 
suggested  that  the  thoughts  herein  ex- 
pressed are  worthy  of  a  more  permanent 
form.  The  subject  at  any  rate  is  one  that 
must  be  considered  by  everyone  actively  in- 
terested in  the  welfare  of  his  country  ;  and 
if  these  talks  can  stimulate  even  to  a  slight 
degree  careful  analysis  of  the  motives  and 
methods  of  fortune-getting  or  thoughtful 
consideration  of  the  methods  and  motives  of 
fortune-using,  they  will  not  have  been  writ- 
ten in  vain. 


GREAT    FORTUNES 


UNIVERSITY 


THE    WINNING 

TT  has  been  said  that  there  are  ten  men  living 
•••  in  the  United  States  who,  if  they  were  willing 
to  act  together,  could,  within  a  short  time,  con- 
trol the  fortunes  of  all  the  great  railroads  of 
the  country,  of  the  steamship  traffic  on  the 
Great  Lakes,  of  more  than  one  of  the  great 
trans-Atlantic  and  trans-Pacific  steamship  lines, 
and  of  the  telephone  and  telegraph  systems. 
They  could  likewise  direct  the  policy  of  by  far  the 
largest  part  of  the  mining  of  anthracite  coal,  of 
the  oil  industry,  sugar  refining,  the  manufacture 
of  steel,  the  mining  of  copper,  the  manufacture 
of  linseed  oil,  even  of  chewing-gum,  and  of  almost 
any  other  one  or  more  industries  which  they  might 
decide  that  they  wished  to  control.  These  same 
men  by  combined  action  now  control  the  most 
powerful  banks  of  the  country  and  are  closely 
[3] 


GREAT      FORTUNES 

associated  with  the  most  powerful  banks  of  Eu- 
rope. They  are  ready  to  make  loans  to  govern- 
ments, to  finance  a  nation  as  they  finance  a 
corporation.  Some  of  these  men  are  now  interested 
in  a  large  way  in  most,  if  not  all,  of  the  industries 
named,  and  wherever  their  interest  is  small  at  the 
present  time,  their  financial  power  is  so  great 
that  by  concentrating  it  on  one  independent 
industry  they  can,  beyond  any  question,  secure 
control  and  manage  it.  The  fact  that  we  have 
great  financial  leaders  whose  power  over  industry 
is  almost  supreme  cannot  be  denied.  The  extent 
of  that  power  and  the  small  number  who  may 
exert  it  is  startling. 

A  short  time  ago  a  man  who  has  been  entirely 
familiar  with  some  of  the  corporation  investiga- 
tions of  the  last  year  was  speaking  about  the  in- 
fluence of  these  great  fortunes  in  social  and 
business  life.  His  talk  was  extremely  pessimistic. 
Some  of  the  managers  of  the  great  corporations, 
he  thought,  seem  to  have  no  scruples  either  re- 
garding the  way  in  which  they  conduct  their 
business  or  in  which  they  put  down  sternly  all 
opposition.  To  stifle  a  government  investigation 
[4] 


THE     WINNING 

or  to  ruin  opponents,  they  would  resort  to  any 
means  however  ruthless,  —  underselling  on  market 
or  stock-exchange,  employing  spies,  bribing  bank 
officials,  corrupting  legislatures  and  courts:  if 
necessary,  even  robbing  the  mails.  They  seem 
above  the  law;  they  defy  the  courts;  they  throttle 
justice.  Is  there  any  outlook  for  an  improvement 
of  present  conditions?  he  asked.  Can  the  State 
ever  control  these  industrial  monopolists,  or  is 
business,  society,  even  the  Government  itself, 
to  be  run  in  their  own  interest  by  a  few  selfish  men  ? 
His  feeling  was  doubtless  too  pessimistic,  but 
this  feeling  is  by  no  means  confined  to  one  man. 
The  conviction  that  the  owners  of  great  fortunes 
have  selfishly  abused  their  power,  and  that  even 
good  government  is  seriously  endangered  by  their 
existence,  is  wide-spread.  Our  popular  magazines 
have  done  their  share  by  publishing  startling  ac- 
counts of  corruption  in  municipalities  and  in 
states,  which,  though  not  impartial,  have  at  least 
much  truth  in  them,  while  the  unprejudiced, 
naked  truth,  as  brought  out  in  judicial  investiga- 
tions, has  served  only  to  stimulate  the  feeling  of 
doubt  and  distrust  on  the  part  of  many.  On  that 
[5] 


GREAT      FORTUNES 

account  it  is  worth  while,  even  though  in  few 
pages  one  can  do  little  toward  offering  a  solution 
of  so  grave  a  problem,  to  attempt  to  analyze  some 
of  the  principles  which  underlie  these  social 
conditions. 

The  Motives  for  Accumulation 

Psychologists  tell  us  that  men's  actions  are  all 
determined  by  feeling.  Knowledge  of  itself  does 
not  determine  action.  We  act  only  to  gratify  some 
desire.  If,  then,  we  are  to  understand  the  social 
causes  and  effects  of  great  fortunes,  the  good  or 
the  evil  which  results  from  their  accumulation 
and  from  the  uses  made  of  them,  we  must  seek 
the  impelling  motives  of  the  wealth-winners  and 
the  wealth-users.  But  we  must  beware  of  too  posi- 
tive conclusions.  Men's  motives  are  not  simple. 

We  too  often  fail  to  realize  that  very  few  people 
make  far-reaching  plans.  Most  of  us  drift  through 
life.  We  do  not  enter  business  or  society  with  a 
definite  end  in  view  and  a  well  formulated  plan 
for  the  attainment  of  that  end.  Some  of  us  go  far 
enough  in  our  youth  to  determine  that  we  shall 
become  lawyers,  or  preachers,  or  merchants,  or 
[6] 


THE     WINNING 

manufacturers;  but  beyond  that  few  go,  and  the 
great  mass  of  humanity  goes  not  even  that  far. 
If  an  opening  comes  for  a  boy  approaching  man- 
hood to  enter  a  grocery  store,  he  becomes  a  grocer. 
If  the  friendship  of  a  neighbor  secures  him  a 
place  as  brakeman  on  a  railroad,  he  becomes  a 
railroad  man.  If  the  necessity  for  an  immediate 
income  is  crowding  him  and  he  has  been  a  fairly 
good  student,  he  may  become  a  teacher.  All  of  us 
in  youth  hope  and  most  of  us  then  confidently 
expect,  but  in  a  hazy,  indefinite  way,  that  we  shall 
be  successful;  but  success  to  most  of  us  is  also 
ill-defined  and  means  usually  a  fair  living,  a  com- 
fortable home,  with  a  glimmering  view  of  prefer- 
ment in  business  or  perhaps  even  in  politics  which, 
as  the  years  go  by,  gradually  fades  into  a  satisfac- 
tion with  comfort.  This  shiftlessness  or  inertia 
on  the  part  of  the  many  gives  to  the  few  their 
opportunity.  The  youth  with  a  positive  aim  in 
life  and  a  persistent  will  steadily  pushes  his  way 
under  ordinary  circumstances  through  the  drift- 
wood of  humanity  to  the  accomplishment  of 
something  far  beyond  the  average,  in  the  direction 
of  his  desires;  and  the  rare  spirits  who,  to  definite- 

[7] 


GREAT      FORTUNES 

ness  of  purpose  and  persistency  of  pursuit,  add 
also  unusual  ability  and  cool-headed  judgment 
of  men  and  affairs,  achieve  their  high  purpose. 
So  with  wealth-getting.  We  all  want  wealth, 
though  many  want  other  things  more.  Those  who 
speak  so  freely  of  the  troubles  of  the  rich  as  a  rule 
are  the  rich;  and  I  have  not  seen  them  voluntarily 
making  themselves  poor.  But  most  of  us  are  not 
very  definite  in  our  plans  for  getting  wealth,  and 
many  of  us  put  other  things  into  the  foreground. 
We  take  what  comes  to  hand  in  our  usual  course 
of  living.  We  are  easily  pushed  aside  by  those 
whose  minds  are  set.  We  soon  fall  back  with  the 
great  majority. 

Success  of  Exceptional  Men 

Some  few  men  have  apparently  a  native  gift 
for  economy  not  merely  of  money  and  wealth, 
but  also  of  time  and  effort.  Such  men  suffer  at 
seeing  waste,  and  gradually  from  this  habit  alone 
will  acquire  a  competency.  When  this  habit  of 
saving  becomes  fixed  on  wealth,  and  is  coupled 
with  the  power  of  administration  which  enables 
one  not  merely  to  economize  his  own  time,  but 
[8] 


THE     WINNING 

by  the  proper  organization  of  the  work  of  others, 
by  planning  for  future  events,  by  prompt  seizure 
of  timely  opportunities,  to  employ  to  the  best 
advantage  the  work  of  others,  success  in  acquiring 
wealth  is  assured.  And  if  to  this  talent  for  organ- 
ization and  administration  there  be  added  the 
consuming  desire  to  acquire  more  and  still  more, 
with  little  regard  for  the  means  employed  or  for 
the  effect  upon  others  of  one's  own  efforts,  the 
prompt  returns  may  be  enormous,  —  unless  the 
unscrupulous  methods  employed  are  pushed  so 
far  as  to  outrage  the  public  conscience,  and  bring 
the  vaulting  ambition  to  sudden  catastrophe. 
With  most  people,  however,  (we  should  keep  it 
in  mind),  there  is  only  the  hazy  intention  of 
getting  on;  with  some  there  is  a  rather  definite 
desire  of  securing  great  wealth,  coupled  generally 
with  some  dreamy  thought  of  the  benefit  to  come 
from  the  wealth. 

Even  those  with  definite  purpose  do  not  long 
for  wealth  with  only  the  thought  of  possession. 
They  often  wish  rather  the  gratification  of  vanity, 
or  social  distinction  in  some  form,  or  power  in 
business,  or  eminence  in  politics,  or  possibly  even 

[9] 


GREAT      FORTUNES 

the  exercise  of  an  influence  for  good  in  society, 
from  the  wise  employment  of  the  wealth  once 
attained.  The  picture  in  the  imagination  is  not 
that  of  the  miser  gloating  in  rags  over  his 
hoards  of  gold.  It  is  rather  that  of  the  leader, 
prosperous,  and  honored  for  the  use  made  of  his 
power. 

We  are  told  that  Cecil  Rhodes,  when  still  a 
stripling,  had  conceived  the  purpose  of  making 
Britain  a  greater  Britain,  and  of  welding  together 
all  the  English  speaking  peoples  into  a  mighty 
confederacy  of  friendship,  if  not  of  politics,  which 
should  dominate  the  business  and  the  politics  of 
the  world.  And  it  is  said  that,  realizing  the  advan- 
tages, perhaps  even  the  necessity  of  great  wealth 
for  the  accomplishment  of  this  purpose,  since  he 
thought  that  he  could  accomplish  little  toward 
the  furtherance  of  his  grand  idea  unless  by  his 
wealth  he  could  control  the  actions  of  legislators 
and  citizens,  he  thought  it  wise  first  to  employ 
his  great  talents  in  the  acquirement  of  wealth, 
though  for  wealth  itself,  except  as  a  means  to  an 
end,  he  had  little  desire.  No  one  questions  the 
success  of  Cecil  Rhodes  as  a  wealth-winner; 
[10] 


THE     WINNING 

few  will  question  his  political  genius.  It  is  never- 
theless extremely  suggestive  to  contrast  his 
method  of  pushing  forward  his  social  and  political 
ideal  by  speculative,  forceful,  dominating,  even 
corrupt,  methods,  and  the  method  employed  by 
the  Founder  of  the  Christian  religion  in  putting 
into  the  world  His  germinating  ideas  of  social  bet- 
terment through  spiritual  improvement,  —  a  per- 
sonality with  no  less  definiteness  of  purpose  than 
Cecil  Rhodes,  no  less  persistence  in  effort,  with 
even  greater  genius  and  foresight  and  knowledge 
of  human  nature.  He  was  willing  to  let  His  ideas 
germinate  and  permeate  like  leaven  throughout 
the  civilized  world.  The  study  of  His  methods 
and  their  success  from  the  practical  point  of  view 
are  conclusive  as  to  the  greatness  of  His  wisdom 
in  social  reform. 

But  we  may  well  analyze  the  ordinary  motives 
somewhat  farther.  Not  many  years  ago  there  was 
an  interesting  interview  with  one  of  the  leading 
promoters  and  most  active  and  successful  business 
men  of  New  York,  a  man  who  enjoyed  the  good 
things  of  life,  but  who  was  subordinating  ordinary 
pleasures,  even  the  comforts  and  amenities  of 


GREAT      FORTUNES 

home  and  social  life,  to  the  desire  for  doing  things. 
He  told  first  about  his  various  engagements,  — • 
how  from  the  time  he  wakened  in  the  morning 
until  late  at  night  every  minute  was  definitely 
planned  for,  his  entire  time  filled  with  engage- 
ments. He  had  a  telephone  in  his  bedroom  that  he 
might  call  business  acquaintances  at  unusual 
hours.  Even  when  he  took  a  little  relaxation  on 
his  steam-yacht  on  Sundays,  he  generally  had  some 
man  on  board,  he  said,  with  whom  he  was  set- 
tling some  business  arrangement.  Then  his  visitor 
ventured  to  ask  him  why  he  allowed  himself  to 
be  so  enslaved  to  business.  He  was  wealthy;  he 
had  more  than  enough  to  gratify  every  normal 
desire,  and  moreover  was  a  man  of  sufficient 
culture  to  appreciate  and  enjoy  the  higher 
pleasures  of  life.  Why  should  he  work  like  a 
galley-slave  ?  He  considered  the  question  thought- 
fully for  a  moment  and  then  said:  "I  think 
it  is  partly  the  habit  of  working.  Then  the 
dealing  with  so  great  a  variety  of  interests  in  so 
directly  practical  a  way  is  in  itself  a  great  education 
which  interests  me  on  its  own  account;  but  primar- 
ily I  think  it  is  because  I  like  to  do  things.  I 
[12] 


THE     WINNING 

like  the  feeling  of  power  which  comes  from  making 
things  move. " 

I  suppose  that  a  similar  feeling  dominates  many 
of  the  makers  of  our  great  fortunes.  Habit  probably 
does  most,  combined  with  an  instinct  for  thrift, 
economy,  diligence;  but  the  desire  to  accomplish, 
the  zeal  for  winning,  the  lust  for  victory  in  contest, 
the  feeling  of  power,  have  probably  more  to  do 
with  the  accumulation  of  the  greatest  fortunes 
than  the  desire  for  wealth  itself  or  the  wish  for 
distinction  or  the  desire  to  accomplish  great  poli- 
tical or  social  ends  through  wealth  as  a  means. 
This  zeal  for  "  playing  the  game "  and  for  power 
would  lead  most  easily  to  dishonorable  acts  and 
to  the  selfish  hard-heartedness  which  is  so  often 
seen  in  the  makers  of  the  great  fortunes. 

But  always,  of  course,  in  the  amassing  of 
fortunes,  there  is  a  mixture  of  motives,  some 
good,  some  bad,  as  with  all  of  us  in  most  of 
our  acts.  This  selection  of  a  few  that  may 
be  considered  the  dominant  ones  is  rather 
to  help  us  to  see  clearly  than  to  intimate  that 
the  analysis  is  complete.  But  whatever  the  chief 
motive  may  be,  if  it  is  an  eager,  insistent  one,  the 
[13] 


GREAT      FORTUNES 

effects  are  likely  to  be  both  good  and  ill  from  the 
methods  that  will  be  used.  Thrift  and  diligence 
are  virtues.  Underhanded  dishonesty  and  hard- 
hearted selfishness  are  vices.  All  are  likely  to  be 
combined  in  the  eager  contest  for  wealth. 

Methods  of  the  Acquirement  of  Wealth 

Of  jgourse,  we  must  recognize  the  fact  that  the 
form  of  holding  property  in  the  shape  of  stocks 
and  bonds,  and  the  ability  thus  to  possess  great 
wealth,  to  use  it  and  to  secure  the  income  from  it 
without  active  participation  in  the  management 
of  a  business,  is  a  modern  condition  which  has 
made  possible  many  of  the  striking  phenomena 
of  the  later  days.  Mr.  George  P.  Watkins  in  an  able 
essay,  as  yet  unpublished,  has  rightly  emphasized 
this  economic  and  legal  condition  which  no  one 
can  afford  to  overlook,  — ji^condition  without 
which  our  modern  methods  of  wealth-building  and 
fortune-using  would  be  impossible.  This  fact  is, 
of  course,  assumed  and  understood  throughout 
the  entire  discussion. 

All  methods  of  wealth-getting  in  society  can 
apparently  be  classified  under  two  main  heads: 
[14] 


THE     WINNING 

first,  the  rendering  of  service  tpj^ejre^rjo_saciety  jjjr 
for  the  sake  of  an  adequate  reward  in  return;  and 
second,  the  acquirement  of  gain  for  one's  self  at 
the  expense  of  others  with  practically  no  service 
rendered  to  society.   A/tAN^^V .  3  *A^  ^>V»/*/ 

/.    Reward  for  Service  to  Society 

The  manufacturer,  the  trader,  the  shipper,  the 
agriculturist,  all  render  definite  services  to  society 
for  which  they  expect,  and  rightly,  a  fair  reward. 
The  manufacturer  who  changes  raw  silk  into  a 
beautiful  fabric,  the  shipper  who  brings  the  fruits 
of  a  milder  climate  to  the  tables  where  they  can  be 
best  enjoyed,  the  agriculturist  who  supplies  the 
wheat,  corn  and  vegetables  for  a  great  people,  — 
all  of  them,  by  changing  the  form  or  the  place  of 
the  materials  with  which  they  work,  give  them 
added  value  and  satisfy  needs  which  otherwise 
could  not  be  served. 

It  is  unfortunate  that  most  of  our  business  men, 
small  as  well  as  great,  think  primarily  of  the  re- 
ward, and  only  remotely  of  the  service  they  are 
rendering  to  society.  The  service  as  well  as  the 
reward  should  be  kept  in  mind.  A  vivid  realiza- 
[15] 


GREAT      FORTUNES 

tion  of  the  fact  that  they  are,  or  should  be,  bene- 
factors to  society,  with  the  feeling  of  responsibility 
which  should  accompany  the  sentiment  of  trustee- 
ship to  a  public  trust,  would,  of  itself,  prevent 
the  evils  of  fraudulent  adulteration  of  foods,  of 
short  weights  and  measures,  of  secret  rebates, 
of  unjust  business  favoritism.  That  sentiment  is 
not  yet  common, —  and  yet  the  fair  profit  of  every 
business  man  is  in  essence  only  a  reward  or  com- 
pensation for  a  service  rendered  to  society;  and 
the  compensation  is  fully  justified. 

Like  the  manufacturer  and  the  agriculturist, 
the  so-called  professional  men,  or  those  who 
render  personal  services,  bring  benefits  to  society; 
the  doctor  who  cures  our  ills,  the  lawyer  who 
secures  for  us  our  legal  rights,  the  servants  who 
minister  to  our  personal  needs,  the  politician  who 
formulates  into  rules  our  plans  for  social  organiza- 
tion, the  organizer  of  business,  or  the  administra- 
tor of  public  works,  who  possesses  perhaps  the 
rarest  talent, —  all  earn  and  deserve  a  reward 
from  society  for  the  services  which  they  render, 
and  they  ought  to  recognize  their  obligation  to 
render  the  best  possible  service. 
[16] 


THE     WINNING 

No  Limit  Can  Be  Placed  Upon  the  Amount  Earned 

by  Service 

Moreover,  it  is  difficult  to  see  how  we  can  place 
any  measure  or  limit  to  the  extent  of  the  service 
thus  rendered,  and  in  consequence,  to  the  reward. 
In  most  cases  there  are  enough  competitors  in  all 
these  lines  of  business  to  prevent  the  making  of 
excessive  profits,  but  in  many  individual  cases  no 
such  limit  can  be  set.  An  able  specialist  has,  or 
often  may  have,  a  kind  of  personal  monopoly  in 
each  case.  It  has  been  a  frequent  saying  of  many 
of  our  social  malcontents  that  all  great  fortunes 
must  be  dishonestly  gained,  because  no  man 
could  himself  earn  a  million  dollars ;  but  any  such 
view  of  the  nature  of  social  service  is  of  course 
short-sighted.  If  I  am  seriously  ill,  and  one  of  the 
modern  geniuses  of  surgery  can  save  my  life  by  a 
bold  operation,  can  I  set  any  limit  to  the  value  of 
the  service  rendered  to  myself  ?  "  Everything  that 
a  man  hath  will  he  give  for  his  life."  If  the  life 
thus  saved  were  the  Me  of  some  great  genius  of 
literature  or  art  or  morals  or  statesmanship,  can 
any  limit  be  placed  upon  the  value  of  the  service 
rendered  to  society?  Who  would  venture  to  esti- 
[17] 


GREAT      FORTUNES 

mate  in  dollars  and  cents  the  value  of  the  service 
which  Shakespeare  or  Raphael  or  Lincoln  might 
have  rendered  to  society  if  his  life  could  have 
been  prolonged  a  decade?  It  is,  of  course,  not 
practicable  for  doctors  to  fix  their  fees  on  the  scale 
of  services  thus  rendered  to  society.  They  could 
hardly  venture  to  estimate  the  relative  values  of 
the  lives  of  their  various  patients.  If  that  principle 
were  to  be  followed,  perhaps  in  some  cases  they 
should  be  paid  rather  for  killing  than  for  curing. 
Moreover,  no  one  surgeon  has  a  monopoly  of  skill. 
Another  might  do  as  well,  and  no  one  should  be 
extortionate.  But,  without  some  definite  basis, 
we  need  not  be  too  much  surprised  at  the  principle 
which  is  often  employed,  of  charging  in  proportion 
to  ability  to  pay.  A  skilful  surgeon  charged  an 
acquaintance  of  mine  $250  for  performing  an 
operation  for  appendicitis  on  his  wife.  Some 
months  afterward  for  a  like  operation  on  a  wealthy 
ward  of  this  same  acquaintance  he  charged  $5,000. 
When  protest  was  made,  he  said, —  "  I  have  looked 
into  his  circumstances;  I  saved  his  life;  I  think 
he  can  afford  it."  And  physicians  generally  do  so 
much  of  their  work  for  charity's  sake  that  there  is 
[18] 


THE     WINNING 


much  excuse  from  the  social  point  of  view  if  they 
take  high  pay  from  those  who  can  afford  it;  and 
yet  another  man  might  do  as  well  at  a  lower  price. 
When,  however,  a  physician  doubles  his  fee  if  the 
patient  dies,  on  the  ground  that  it  is  relatively 
easy  to  collect  from  an  estate,  the  limit  of  tolerance 
of  the  principle  of  "  charging  what  the  traffic  will 
bear,"  has,  in  my  judgment,  been  passed.  Society 
itself,  if  necessary,  through  a  jury,  may  be  the 
judge  of  what  in  individual  cases  is  just  and 
reasonable  pay  for  the  personal  and  social  service 
rendered. 

Not  to  take  the  time  to  estimate  the  services  of 
a  lawyer  who  prepares  a  constitutional  act  on 
which  the  liberties  of  a  people  may  depend,  or  of  a 
judge  whose  interpretation  of  the  law  may  save 
millions  of  dollars  to  the  public,  or  of  a  statesman 
whose  tact  and  wisdom  may  save  his  country's 
honor  while  avoiding  a  war  that  would  cost  hun- 
dreds of  thousands  of  lives  and  hundreds  of  mil- 
lions of  property,  we  may  perhaps  pause  to  inquire 
whether  any  limit  can  be  fixed  to  the  service 
rendered  by  one  of  the  great  captains  of  industry 
whose  genius  lies  in  the  organization  of  business, 
[19] 


GREAT      FORTUNES 

because  it  is  these  captains  of  industry  whose 
wealth  is  ordinarily  subject  to  criticism,  and  not 
the  judge  and  the  statesman  whose  financial  re- 
wards are  ordinarily,  relatively  speaking,  absurdly 
small  as  compared  with  the  services  they  render. 
So  far  as  I  can  see,  no  limit  can  be  placed  upon 
the  value  of  the  service  rendered  by  such  an  or- 
ganizer of  business.  Of  two  great  manufacturing 
establishments  with  equal  capital,  equally  favor- 
able situation,  equal  excellence  of  plant,  one  will 
fail,  while  the  other,  with  no  superiority  except  in 
the  organizing  and  directing  brain  of  the  manager, 
without  asking  any  higher  prices  for  its  product, 
without  paying  any  less  wages  to  its  employees, 
will  make,  for  its  stock-holders,  millions.  It  seems 
difficult  to  reach  any  other  conclusion  than  that 
these  millions  have  been  earned  by  the  manager 
through  preventing  waste  of  time  and  waste  of 
energy,  and  that  society  is  by  that  total  amount  the 
gainer. 

The  experience    thus    indicated    in    a    manu- 
facturing industry  is  likewise  found  in  railroad  or 
steamship  management,  or  in  any  other  of  the 
great  avenues  of  production  or  exchange.  To  be 
[20] 


THE     WINNING 

sure,  in  many  instances,  the  skill  of  management 
seems  to  be  a  readiness  to  oppress  the  laborers  or 
to  squeeze  the  consumers  either  through  higher 
prices  or  through  poorer  products,  but  this  is  not 
necessarily  the  case;  and  often  the  difference  is 
found  only  in  the  prevention  of  waste  and  in  the 
more  efficient  organization  and  direction  of  the 
power  of  capital  and  labor.  The  extent  of  this  ad- 
vantage, of  course,  depends  very  largely  upon  the 
extent  of  the  business.  The  business  may  afford 
the  opportunity  of  saving  a  few  thousands,  but  it 
may  equally  well  afford  the  opportunity  of  saving 
millions. 

Concentration  and  control  of  industrial  power 
does  not  come  by  chance  nor  in  the  main  by 
fraud  or  crime,  although  doubtless  at  times,  fraud 
and  crime  have  played  their  part  as  they  do  in 
practically  all  mundane  affairs^  In  many  j&ses, 
the  power  comes  grn.Hna.lly  but  surely  into  the 
hands  of  those  who  have  known  best  how  to  seize 
the  opportunities  that  economic  conditions  offer; 
who  know  best  so  to  organize  industry  and  the 
"TfienT  eniT^oy^d^JrLJiidiistry  thatjthe  largest  sav- 
ings,  the  least  expenditure  of  industrial  energy, 
[21] 


GREAT      FORTUNES 

r  will  produce  the  largest  results  in  the  produc- 
tion of  wealth.  These  are  in  good  part  the  men 
who,  whatever  else  they  may  do,  know  best 
how  to  "  make  two  blades  of  grass  grow  where 
but  one  grew  before."  A^jprominent  cause, 
then,  that  has  brought  power  and  wealth  into 
the  hands  of  the  few,  let  us  not  forget,  is  the 
fact  that  these  few  have  been  able  to  render  the 
greatest  service  to  society  in  the  way  of  cheaper 
production,  swifter  distribution,  greater  returns 
for  capital  invested. 

II.    Gains  at  the  Expense  of  Others 

(a)  PLUNDER:  There  are  two  or  three  main 
forms  in  which  gain  for  one's  self  at  the  expense 
of  others  is  secured  with  no  material  service 
rendered  to  society,  sometimes  with  society  in- 
jured thereby.  It  is  probable  that  most  of  the 
greatest  fortunes  in  the  history  of  the  world  have 
been  made  in  some  such  way,  although  many  have 
been  made  by  the  rendering  of  direct  service.  In 
the  ancient  days,  as  we  know,  many  of  the  greatest 
fortunes  were  secured  directly  by  plunder.  When 
a  Roman  pro-consul  like  Verres  was  sent  to  Sicily, 
[22] 


THE     WINNING 

or  a  Pompey  to  Asia,  or  a  Caesar  to  Spain  or  Gaul, 
it  was  expected  that  he  would  come  back  a  wealthy 
man.  Even  the  relatively  honest,  kindly  Cicero, 
who  boasted  that  in  his  government  of  a  province 
he  oppressed  no  one  and  was  beloved  by  all,  made 
some  $100,000  in  less  than  one  year.  Caesar,  with 
a  daring  which  characterized  him  through  life,  had 
borrowed  recklessly  to  the  extent  of  doubtless 
a  million,  if  not  millions  of  dollars,  and  even  risked 
everything  upon  his  success  in  securing  office; 
but  after  his  appointment  to  the  control  of  Spain 
and  of  Gaul,  his  future  was  secured  not  less  surely 
from  the  financial  point  of  view  than  from  the 
military  and  political.  Of  course  we  may  well  say 
that  the  pro-consul  was  entitled  to  return  for  his 
work  in  governing;  but  probably  no  one  would 
pretend  that  the  returns  were  in  any  way  suppos- 
ed to  be  measured  by  the  services  rendered,  or 
that  revenues  saved  to  increase  one's  personal 
fortune  would  not,  in  many  cases,  if  not  in  most, 
more  properly  have  been  turned  into  the  public 
treasury. 

In  those  days  also,  as  well  as  throughout  the 
Middle    Ages,    even    down    into    modern   times, 
[23] 


BEAT      FORTUNES 

wherever  an  absolute  ruler  has  been  able  to  control 
the  fortunes  of  his  people  and  to  levy  practically 
at  will  upon  their  property,  such  rulers,  besides 
accumulating  wealth  for  themselves,  have  often 
distributed  it  lavishly  among  their  favorites.  In 
many  such  cases,  great  fortunes  have  been  put 
into  single  hands  which  have  simply  been  seized 
from  others  less  fortunate.  Happily  these  days  of 
direct  plunder  and  of  gifts  to  favorites  have  passed, 
though  those  of  unjust  taxation  at  times  remain ;  and 
in  our  own  day  many  other  practices  obtain 
which  have  the  same  results  as  plunder,  so  far  as 
any  immediate  effect  upon  society  is  concerned. 

(  b  ^GAMELLNG^  In  one  or  two  places  in  the 
civilized  world  we  find  great  fortunes  that  have 
been  won  directly  by  encouraging  gambling. 
The  Prince  of  Monaco  could  hardly  claim  to 
be  rendering  any  special  service  to  society  in 
the  way  of  an  increase  of  wealth  by  his  great 
gambling  establishment  at  Monte  Carlo.  The 
wealth  which  flows  into  his  coffers  comes 
from  the  pockets  of  others,  with  a  return,  to  be 
sure,  of  the  gratification  of  the  gambling 
passion,  but  with  no  increased  value  given 
[24] 


THE     WINNING 

to  society.  Doubtless  the  Prince  sometimes 
makes  use  of  part  of  this  wealth  more  wisely  than 
those  from  whom  it  has  been  taken  would  have 
done;  but  although  he  is  a  scientist  and  we  may 
recognize  fully  the  scientific  value  of  his  deep-sea 
dredging,  in  no  proper  sense  of  the  word  can  there 
be  said  to  be  any  benefit  to  society  from  the  pro- 
cess of  gambling. 

While  the  boards  of  trade  and  the  stock  ex- 
changes of  the  United  States  perform  a  most  useful 
function  in  the  distribution  of  goods,  so  far  as 
their  proper  use  is  concerned  (and  let  it  not  be 
overlooked  that  I  recognize  to  the  full  their  in- 
dispensable services),  a  very  large  percentage  of 
the  so-called  "business"  of  those  exchanges  is 
still  gambling,  pure  and  simple,  merely  the  stak- 
ing of  one's  opinion  against  another's  as  to  the 
future  price  of  grain  or  stocks.  Gains  and  losses 
made  in  any  such  way  are  simply,  in  effect,  the 
transfer  of  property  from  the  possession  of  one  to 
another  with  no  added  value  given  for  any  risk, 
and  with  no  service  rendered  to  society,  unless  it 
be  (  as  in  the  case  of  the  gambling  that  is  directly 
known  by  that  name),  the  fillip  to  enjoyment 
[25] 


GREAT      FORTUNES 

which  comes  from  stimulating  the  fever  of  specu- 
lation. But  there  are  grave  though  more  subtle 
evils  which  arise  from  gambling  under  the  name 
of  business. 

Unfair  Speculation 

When  fortunes  are  so  readily  made  from  fluctua- 
tions in  the  price  of  grain  or  of  stocks,  it  naturally 
grows  to  be  the  custom  that  any  individual  trader 
will  keep  to  himself  any  information  which  is 
likely  to  affect  the  prices  of  the  commodities  in 
which  he  deals,  and  his  purchases  or  his  sales  will 
then  be  made  with  a  certainty  of  profit  which 
amounts  to  an  unfair  inflicting  of  a  loss  upon  the 
person  with  whom  he  deals.  No  one  questions 
the  legality  of  many  such  actions,  but  ethically 
such  a  transaction  is  virtually  gambling  with 
loaded  dice.  A  friend  of  mine  as  director  of  a 
large  manufacturing  corporation  learned  that 
his  company  was  about  to  build  a  new  plant  in  a 
rural  suburb.  The  plan  was  still  a  secret.  Across 
the  road  from  the  site  determined  upon  were 
vacant  lots  which  could  be  bought  at  the  day  for 
a  song,  but  which  would  rise  sharply  in  value 
[26] 


THE     WINNING 

as  soon  as  the  plans  of  the  company  became 
known.  Should  he  buy  those  lots  and  take  the 
profit?  He  had  plenty  of  money  available.  He 
decided  that  he  ought  not  to  take  advantage  of 
his  private  information,  and  he  left  the  profit  for 
the  original  holders.  Would  you  or  I  have  de- 
cided as  he  did  ? 

A  step  further  is  taken  when  the  director  of  a 
corporation  from  his  position  as  director  gains 
information  which  is  certain  to  affect  the  value 
of  the  stocks  or  bonds  of  the  corporation  itself, 
and  acting  on  that  information  goes  into  the 
market  and  buys  or  sells  the  stocks  of  his  own 
company,  winning  profits  —  in  this  case  clearly 
"  tainted "  profits  —  for  himself  at  the  expense 
of  the  stock-holders  for  whom  he  is  a  trustee.  And 
yet  transactions  such  as  these  are  by  no  means 
uncommon,  and  doubtless  many  of  the  large 
fortunes  of  London  and  New  York  have  been  made 
in  good  part  in  exactly  this  way.  It  cannot  be  said 
in  any  of  these  cases  that  the  profit  made  comes 
in  any  sense  as  a  payment  for  services  rendered  to 
an  individual  or  to  society.  The  property  has  been 
taken  from  one  and  transferred  to  another  with 
[27] 


GREAT      FORTUNES 

no  service  rendered  in  return.  It  is  always  difficult, 
of  course,  to  draw  the  line  clearly  between  legiti- 
mate trading  and  gambling  on  the  stock  exchange, 
and  one  cannot  be  too  cautious  about  making 
charges  in  specific  cases.  But  the  principle  is 
clear.  When  the  gain  of  one  person  is  made  at  the 
expense  of  another  without  any  service  to  society, 
and  especially  when  that  gain  is  brought  about 
by  special  knowledge  improperly  withheld  so 
that  the  chances  in  the  gambling  game  are  not 
even,  the  act  is  dishonorable,  and  unjust,  and 
detrimental  to  the  public. 

Even  worse  perhaps  is  the  case  where  a  large 
holder  of  stock,  merely  by  virtue  of  his  large  hold- 
ings, is  able  at  will  to  sell  blocks  of  stock  so  large 
as  to  depress  the  price,  or  again  to  buy  it  up  so  as  to 
raise  the  price,  adjusting  the  times  of  his  actions 
to  the  settling  days  in  such  a  way  that  his  hapless 
victims,  blundering  in  their  ignorance  of  his  plans, 
can  have  no  knowledge  of  the  ways  in  which  they 
have  lost,  but  can  be  conscious  only  of  the  fact 
that  "luck"  has  gone  against  them.  This  is 
clearly  plunder. 

( c )  MONOPOLY  .  Of  like  nature  in  part,  and 
[28] 


THE     WINNING 

yet  different  in  kind,  and  in  many  instances 
different  in  results,  are  the  gains  of  monopoly. 
I  do  not  mean  to  assert  that  monopoly  in  itself 
is  always  bad.  It  may  well  be  that  a  monopoly 
may  serve  the  public  interest  or  be  created  for 
the  public  welfare,  although  usually  such  is  not 
the  case;  but  a  monopoly  gain,  so  far  as  the 
gain  comes  from  the  principle  of  monopoly  itself 
beyond  the  reward  for  service  rendered,  is  merely 
the  transfer  of  property  from  one  person  to 
another  without  a  corresponding  service  rendered 
in  return. 

TJte  Patent  Monopoly 

No  one  questions  that  the  inventor  of  a  valuable 
machine  has  rendered  a  distinct  service  to  society 
for  which  he  should  be  paid,  and  liberally  paid. 
It  has  been  thought  the  best  policy  by  our  Govern- 
ment to  pay  the  inventor  by  granting  him  a  mono- 
poly for  a  term  of  years,  and  doubtless  it  is  well 
to  stimulate  invention  in  this  way,  unless  a  better 
way  can  be  found.  In  many  cases,  however,  the 
fact  of  monopoly  enables  the  owner  of  the  patent 
to  win  his  high  monopoly  profits  by  limited  sales 
[29] 


GREAT      FORTUNES 

and  high  prices.  A  much  greater  service  would  be 
rendered  to  society  by  a  price  nearer  the  com- 
petitive range  which  would  extend  the  sales  much 
more  widely  and  be  of  much  greater  benefit  to 
society  and  which  might  return  to  the  owner  of  the 
patent  nearly  as  great  rewards.  It  is  a  question 
whether  it  would  not  be  wiser  for  the  state  to  reward 
the  inventor  by  a  fixed  and  liberal  royalty,  and 
then,  by  throwing  the  patented  article  open  to  the 
freest  competition  among  manufacturers,  to  render 
the  greatest  service  to  society  by  supplying  the 
available  product  at  the  lowest  practicable  price. 

Natural  Monopolies 

The  same  principle  holds  with  reference  to  the 
so-called  natural  monopolies,  the  street  railways, 
the  electric  lighting  plants,  the  telegraph,  the 
railroads.  Competition,  as  is  well  known,  cannot 
control  such  corporations,  and  so  far  as  the  gains 
are  technically  the  high  gains  of  monopoly,  in 
distinction  from  the  fair  returns  on  the  invest- 
ment, the  great  fortunes  amassed  from  these 
sources  are  practically  transfers  from  the  pockets 
of  the  general  public  to  the  pockets  of  the  stock- 
[30] 


THE     WINNING 

holders  without  an  adequate  service  rendered  in 
exchange.  Some  service  is  rendered  to  be  sure, 
even  a  great  service;  but  the  gain  is  often  excessive. 
The  right  to  the  streets  is  vested  in  the  public. 
The  control  of  transportation  is  a  right  of  the  pub- 
lic, and  high  monopoly  gains  from  the  use  of  the 
streets,  so  far  as  they  are  beyond  a  reasonable  re- 
turn for  the  capital  and  energy  invested  and  the  risk 
incurred,  are  made  at  the  expense  of  the  public. 
In  such  instances,  the  proper  policy  is  doubtless 
for  the  state  to  protect  both  the  investor  and  the 
public  by  whatever  arrangement  is  best  suited 
to  the  local  conditions,  so  that  the  investment  of 
capital  and  the  expenditure  of  energy  shall  reap 
their  due  and  fair  reward  for  the  service  which  is 
rendered  to  the  public,  while  the  state  shall 
prevent  the  enormous  gains  of  monopoly  at  the 
expense  of  the  public  which  in  many  cases  have 
heretofore  been  secured.  In  many  small  places 
the  franchise  is  probably  not  worth  more  than  a 
fair  interest  on  the  investment;  but  in  many 
large  cities  it  is  worth  millions.  I  am  not  over- 
looking the  difficulties  of  fixing  a  reasonable  gain 
(the  practical  problem  is  extremely  complex); 
[31] 


GREAT      FORTUNES 

but  there  is  no  question  as  to  the  nature  of  the 
principle  involved.  Private  capital  and  effort 
should  reap  a  fair  reward;  the  public  should  be 
protected  against  undue  gains. 

Undue  Exercise  of  Power  in  Bargaining 

We  perhaps  too  seldom  think  of  the  real 
nature  of  the  gain  which  comes  through  undue 
exercise  of  power  by  one  party  to  a  bargain  over 
the  other.  I  have  spoken  of  monopoly  price,  but 
the  principle  of  monopoly  is  found  no  less  in  many 
transactions  where  it  does  not  openly  appear.  It 
may  well  be  that,  owing  to  some  local  circumstance, 
a  borrower  of  money  is  practically  limited  in  his 
borrowing  to  one  money-lender.  If  his  need  is 
great,  the  lender  may  exact,  not  the  reasonable  re- 
turn for  the  use  of  capital  that  is  just  and  in  the 
interests  of  society,  but  an  unreasonable,  extortion- 
ate usury  which  does  not  benefit  society,  but 
which  merely  transfers  unjustly  ownership  of 
property. 

Special  Advantages 

Different  also  in  nature  from  monopoly  gains 
but  equally  without  the  return  of  service  for  profits 
[32] 


O  IM  I  V  tl  k\.  »3  1  IY 
THE     WINNING 


made,  are  the  fortunes  which  are  based  upon 
special  privileges  or  favoritism  of  some  sort.  In 
the  earlier  days  these  privileges  usually  took  the 
form  of  legal  monopoly  and  were  granted  by  the 
state;  now,  in  many  cases,  under  different  condi- 
tions and  forms,  we  still  get  a  virtual,  though  not 
a  legal,  monopoly. 

If  a  city  council  grants  to  a  corporation  at  too 
low  a  rate  a  franchise  for  electric  lighting  or  a 
street  railway  system,  this  is  of  course  practically 
a  monopoly  granted  by  the  government;  but  an 
advantage  scarcely  less  great,  though  different 
in  kind,  is  sometimes  given  to  shippers  by 
railroads  in  the  form  of  special  rates  or  of  re- 
bates for  freights  paid.  This  form  of  privilege 
granted  by  railroads  to  certain  shippers  is  so  well 
known  that  it  needs  no  extended  comment.  It  is, 
of  course,  clear,  however,  that  the  profit  made  by 
a  shipper  through  rebates  is  probably  a  profit  made 
without  any  adequate  return  rendered  to  society, 
or,  for  that  matter,  in  many  cases,  without  any 
special  service  to  the  railroad  more  than  is  usually 
rendered  by  the  shipper.  It  would,  of  course,  be  too 
much  to  assert  that  the  favored  shipper  does  not 
[33] 


GREAT      FORTUNES 

in  certain  cases  render  a  special  service  to  the 
railroad.  If  the  shipper  can  himself  furnish  freight 
by  the  train-load  instead  of  by  two  or  three  cars 
at  a  time,  the  railroad  is  certainly  benefited  there- 
by. If,  as  was  the  case  in  the  earlier  days  with  the 
Standard  Oil  Company,  a  large  shipper  can  be- 
come an  "evener"  of  traffic  as  between  different 
railroads  that  have  entered  into  an  agreement  to 
divide  the  freight  between  certain  competitive 
points,  the  shipper  may  doubtless  render  a  special 
service  to  the  railroad.  It  is  the  usual  opinion, 
however,  and  an  opinion  upheld  by  the  courts, 
that  any  such  services  which  bring  about  discrim- 
ination between  different  shippers  is  contrary  to 
public  policy,  and  therefore  ought  not  to  be  grant- 
ed. So  far,  then,  as  freight  rebates  and  special  dis- 
criminations in  railroad  rates  are  concerned,  we 
may  say  that  in  many  cases  fortunes  made  through 
these  rebates  are  made  without  any  adequate 
service  rendered  to  the  railroad  in  return;  and  in 
the  other  cases  we  may  say  that,  inasmuch  as  such 
a  service  to  the  railroad  has  been  held  to  be  con- 
trary to  public  policy,  the  shipper  has  received  his 
favors  and  has  become  wealthy  without  the  re- 
[34] 


THE     WINNING 

turn  of  any  adequate  service  to  the  public.  We 
need  perhaps  not  dwell  upon  the  fortunes  that 
have  been  gained  through  these  favors  granted  by 
the  railroads.  They  go  far  beyond  the  fortune  of 
the  shipper  and  include  in  many  cases  fortunes  of 
real  estate  speculators  often  connected  with  the 
railroads,  through  the  building  up  of  one  locality 
at  the  expense  of  another.  They  include  likewise 
the  fortunes  given  to  subsidiary  companies  by 
special  contracts  which  often  lessen  the  profits  to 
the  stock-holders  of  the  railroad,  and  all  of  the  so- 
called  abuses  which  have  arisen  through  secret 
discriminations  of  various  kinds. 

In  this  same  category  should  be  placed,  of 
course,  practically  all  unfair  methods  of  com- 
petition, such  as  the  purchase  of  secret  information 
regarding  a  competitor's  business  from  agents  of 
that  competitor  and  all  other  methods  of  com- 
petition which  are  contrary  to  public  policy.  In 
all  such  cases,  whatever  may  be  the  service 
that  is  rendered  to  some  individual,  so  long  as 
the  acts  are  those  contrary  to  public  policy,  no 
service  is  rendered  to  society  for  the  wealth  thus 
gained. 

[35] 


GREAT      FORTUNES 

The  Gain  is  to  the  Strong  of  Whatever  Class 
There  has  been  much  discussion  of  late  years 
regarding  the  principles  involved  in  the  great 
struggles  between  the  employers  of  labor  and  their 
working-men.  We  must  in  no  such  case  overlook 
the  difficulties  which  arise  from  the  complexity  of 
the  problem.  It  is  not  possible  for  any  person  in 
the  case  of  a  great  labor  contest  so  to  know  and  so  to 
weigh  all  of  the  multiplicity  of  factors  which  enter 
into  the  question  of  wage  making,  that  he  can  be 
sure  that  he  is  rendering  an  absolutely  just  de- 
cision. But  this  much  is  clear:  that  in  every  great 
contest  of  the  nature  mentioned,  there  is  a  product 
to  be  divided  among  the  employers,  the  laborers, 
and  the  public.  And  as  matters  go,  there  is  little 
doubt  that  whichever  one  of  these  great  contestants 
has  the  advantage  through  a  monopoly  more  or  less 
complete,  or  through  other  irresistible  power,  that 
one  will  secure  the  advantage.  If  the  supply  of 
labor  is  large  and  the  employers  are  few  and  or- 
ganized, so  that  they  have  a  practical  control, 
there  can  be  little  doubt  that  wages  will  be  crowded 
unreasonably  low  and  that  the  profits  of  the  em 
ployers  will  in  part  be  of  that  class  mentioned: 
[36] 


THE     WINNING 

not  just  and  reasonable  payment  for  services 
actually  rendered  in  the  production  of  goods, 
but  rather  transfers  from  the  pockets  of  the 
laborers  to  the  pockets  of  the  employers  made 
by  virtue  of  their  controlling  position. 

If,  on  the  other  hand,  the  laborers  by  virtue  of  a 
thoroughly  organized  union  are  enabled  so  to  con- 
trol the  labor  supply,  particularly  in  times  of 
strong  demand,  that  they  have  the  advantage, 
there  can  be  little  doubt  that  they  too  will  so 
misuse  their  power  that  their  gains  will  not  be  all, 
although  they  may  be  in  good  part,  those  which 
come  from  an  adequate  compensation  for  the 
service  rendered;  but  they  also  will  be  in  part  like 
monopoly  gains.  Instances  are  not  wanting  of 
trade  unionists  who  have  had  so  nearly  a  control  of 
the  labor  supply  in  their  line  of  work  that  their  high 
wages  have  forced  the  profits  of  all  but  the  most  skil- 
ful of  their  employers  so  low  that  the  industry  has 
been  injured  on  the  one  hand,  and  on  the  other  the 
prices  of  the  product  have  been  kept  so  high  by 
these  high  wages,  that  the  benefit  to  the  public  has 
been  greatly  lessened  through  limited  consumption. 

And  even  at  times  the  great  blundering  stupid 
[37] 


GREAT      FORTUNES 

giant,  the  public,  usually  without  deliberate  inten- 
tion, but  sometimes  none  the  less  successfully, 
so  uses  its  power  over  industry,  through  legisla- 
tion or  the  pressure  of  public  sentiment,  that 
both  employers  and  laborers  are  made  to 
suffer  unjustly,  while  the  public  reaps  a  benefit 
through  too  low  prices.  An  unregulated  competi- 
tion, brought  about  by  stupid  inaction  on  the  part 
of  the  Government  or  at  times  even  by  an  unwise 
stimulus  to  competitive  bidders  on  government 
contracts,  may  lead  to  the  oppressive  employment 
of  children's  labor,  and  may  force  prices  so  low 
for  the  immediate  benefit  of  the  taxpayers  that  the 
profits  of  the  employers  will  not  reasonably  com- 
pensate them  for  their  services,  while  the  laborers 
will  be  held  down  to  unjustly  low  wages.  I  grant 
freely  that  in  the  case  of  government  contracts 
for  supplies,  such  instances  are  extremely  rare. 
But  on  the  other  hand,  the  same  principle  applies, 
and  the  instances  are  by  no  means  rare,  when 
the  Government  demands  the  services  of  the 
ablest  public  men  in  important  diplomatic  or 
executive  positions  at  so  low  a  wage  that  only 
the  rich  can  take  the  places.  It  is  a  well  known 
[38] 


THE     WINNING 

fact  that  few,  if  any,  of  our  ambassadors  receive 
a  salary  large  enough  to  pay  the  expenses  which 
they  must  incur  if  they  are  to  do  their  work  satis- 
factorily. Instances  of  men  being  required  to 
spend  twice  or  three  times  the  salaries  which  they 
receive  are  not  confined  to  the  diplomatic  service, 
but  are  found  in  many  other  departments  of 
Government.  The  result  is  that  it  is  becoming  a 
desirable  qualification  for  many  offices  that  a 
man  should  possess  independent  means,  so  that 
he  may,  without  serious  sacrifice  or  temptation  to 
dishonesty,  live  beyond  his  salary.  Doubtless  some 
of  the  corruption  in  our  consular  service  has  been 
due  to  the  unjust  exploitation  of  government  officers 
by  the  Government,  which  has  forced  them  either 
to  live  beyond  their  means  or  to  perform  their 
public  duties  in  ways  much  less  expensive  than 
those  employed  by  men  holding  similar  posi- 
tions under  foreign  governments.  This  policy  of 
saving  money  for  the  Government  at  the  expense 
of  its  service  is  as  unjust  and  unwise  as  similar 
actions  on  the  part  of  employers  in  holding  wages 
too  low,  or  of  labor  unions  in  extorting  unjust 
wages  from  their  employers. 
[39] 


GREAT      FORTUNES 

It  is  worth  while  thus  to  attempt  to  see  through 
some  of  the  varying  phases  which  this  principle  of 
monopoly  or  that  of  unjust  discrimination  or  that 
of  overweening  power  may  assume,  in  order  that 
we  may  be  able  to  judge  somewhat  more  accurate- 
ly and  justly  the  methods  by  which  some  great 
fortunes  are  built  up.  We  must  not  misunderstand. 
Most  monopolies  render  services  to  society.  They 
are  entitled  to  rewards,  liberal  rewards  for  their 
services;  but  the  "monopoly  principle"  gives 
them  at  times  much  more;  and,  socially,  they  are 
not  entitled  to  this  surplus  gain.  While  we  do  not 
in  common  conversation  speak  of  the  Government 
winning  a  great  fortune  by  the  brutal  exercise  of 
its  monopoly  power,  it  is  still  true  that  in  a  poor 
state  the  Government  may  and  at  times  does  extort 
by  taxation  or  otherwise  too  much  for  the  lavish 
living  of  its  officials,  who,  by  such  methods,  are 
reaping  the  benefits  in  the  splendor  of  their  pub- 
lic life  which  private  fortune  owners  enjoy  in 
their  private  capacity. 

It  will  serve  as  an  example  if  we  recall  the  lavish 
luxury  of  the  South  Carolina  legislature  in  re- 
construction days,  when  former  plantation  hands 
[40] 


THE      WINNING 

lolled  at  their  ease  on  $200  sofas,  used  $20  cus- 
pidors and  entertained  themselves  and  their 
friends  in  restaurants  and  lodgings  at  the  expense 
of  the  state.  The  case  was  exceptional  and  the 
experience  a  fleeting  one,  though  all  too  long  for 
the  taxpayers;  but  those  who  are  socialistically 
inclined  may  well  note  the  private  use  that  govern- 
ment officials  may  make  of  public  funds. 

While  we  may  not  say  that  by  the  exercise  of  their 
monopoly  power,  the  trade  unionists  amass  great 
fortunes,  it  is  important  for  us  to  keep  in  mind, 
that  at  times  the  labor  unionist,  although  he  may 
not  gain  a  large  fortune,  is  acting  from  the  same 
motives  and  quite  as  unjustly,  as  the  great  for- 
tune-getter. He  is  thereby  as  worthy  of  condem- 
nation in  adding  unfairly,  or,  in  special  cases, 
cruelly,  thirty  cents  a  day  to  his  wages,  as  is  his 
employer  who  may  amass  millions. 

Let  me  emphasize  again  what  I  said  before, 
that  it  is  probably  in  and  through  the  exercise  of 
the  principle  of  plunder  or  the  undue  exercise 
of  advantage,  of  gambling  or  of  its  allied  principle 
of  monopoly,  or  of  special  privilege  or  favor  of 
some  kind  that  many,  very  many,  if  not  most  of 
[41] 


GREAT      FORTUNES 

the  greatest  fortunes  have  been  won.  And  yet 
let  me  say,  with  no  less  emphasis,  that  it  is  still 
within  the  power  of  a  great  business  personality, 
and  it  has  been  the  experience  of  many  a  person- 
ality of  that  type  to  win  a  great  fortune,  no  part 
of  which  was  extorted  by  monopoly  or  unfair 
discrimination  of  any  kind,  but  all  of  which,  even 
though  it  amounted  to  many  millions,  was  secured 
as  a  just  and  reasonable  payment  for  services 
actually  rendered  to  society. 

Fortune  Using  is  the  Prime  Consideration 

These  considerations  regarding  fortune-winning 
should  be  carefully  considered;  we  may  then 
attack  the  further  problem  of  fortune-using. 
For  that  is  the  prime  consideration,  and  we 
must  be  just  to  all  classes.  We  are  in  danger  of 
recklessly  ascribing  evil  purposes  to  the  rich,  vir- 
tue to  the  poor.  While  it  is  true  beyond  doubt 
that  a  man  is  no  better  because  he  is  rich,  we  need 
often  to  keep  also  in  mind  the  fact  that  a  man  is 
no  better  because  he  is  poor.  Manhood  and  woman- 
hood are  independent  of  wealth  or  of  poverty. 
They  are  matters  of  character  and  purpose.  We 
[42] 


THE     WINNING 

need  particularly  at  this  age  and  in  this  country, 
where  we  have  made  such  enormous  economic 
advance,  to  realize  that  it  is  not  the  wealth  itself 
that  counts  for  either  ill  or  good,  but  the  use  that  is 
made  of  it.  While  we  must  not  underestimate  the 
great  uplift  to  civilization  that  comes  from  raising 
the  common  standard  of  living  for  the  poorer 
classes,  and  this  is  probably  the  best  possible  use 
of  wealth,  we  must  also  not  overlook  the  fact  that, 
as  we  look  back  through  the  ages,  the  peoples 
that  have  stood  in  the  forefront  of  the  world's 
historic  advance,  the  peoples  that  have  done  the 
most  to  uplift  the  higher  civilization  throughout 
the  world,  are  those  in  which  the  getting  of 
wealth,  although  encouraged,  was  subordinated  to 
the  use  that  was  made  of  it.  Pericles  said  in  his  fun- 
eral oration  in  the  Ceramicus  over  the  dead  who 
had  fallen  at  Marathon,  —  "  We,  the  Athenians, 
aim  at  a  life  beautiful  without  extravagance;  con- 
templative without  unmanliness.  Wealth  with  us 
is  a  thing  not  for  ostentation,  but  for  reasonable 
use,  and  it  is  not  the  acknowledgment  of  poverty 
that  we  think  disgraceful,  but  the  lack  of  endeavor 
to  avoid  it."  Wealth  was  to  be  employed  large- 
[43] 


GREAT      FORTUNES 

ly  for  the  public  good,  and  the  wealth  which 
came  to  Athens  in  her  most  prosperous  days  was 
used  in  building  her  temples  and  embellishing 
them  with  works  of  art,  in  building  her  theaters 
and  encouraging  in  them  the  production  of 
dramas  of  the  highest  rank,  and  in  seeing  to  it 
that  every  citizen  had  the  leisure  to  get  the  benefit 
of  such  means  of  culture,  so  that  Athens  has  stood 
from  that  day  to  this  as  a  center  toward  which  all 
lovers  of  art  and  literature  and  refinement  have 
turned,  and  as  a  state  whose  influence  in  shaping 
the  higher  life  seems  not  to  lessen  but  to  increase 
as  the  ages  pass. 


[44] 


THE  USING 

Benefits   of    Single    Management   in  Production 

WE  shall  do  well  in  turning  from  the  mo- 
tives and  the  methods  of  the  fortune- 
getters  to  consider  the  social  results  of  great  for- 
tunes, first  to  make  inquiry  regarding  the  effects  of 
the  unification  of  a  large  property  especially  re- 
garding its  management  by  a  single  head.  Are  the 
results  good  or  bad  ?  In  the  first  place,  general 
prosperity,  often  shown  by  rapid  increase  in  wealth, 
is  beneficial,  but  there  are  also  benefits  to 
society  from  having  a  great  fortune  under 
a  single  management.  No  one  now  ques- 
tions the  advantages  to  production  which  flow 
from  industry  carried  on  on  a  large  scale.  Only 
great  establishments  can  get  the  best  equipment 
for  cheap  production;  only  such  can  secure  the 
ablest  men  throughout  the  entire  industry  in  the 
places  for  which  they  are  best  adapted;  only  such 
[45] 


GREAT      FORTUNES 

can  make  the  enormous  savings  in  the  cost  of  sell- 
ing goods  which  come  from  doing  away  with  the 
competitive  bidding  of  traveling  men  and  with 
costly  advertising.  If  an  industry  is  practically 
consolidated,  so  that  the  only  need  for  advertising 
is  to  let  purchasers  know  where  and  how  goods 
can  be  found  and  what  the  qualities  of  those  goods 
are,  the  saving  may  be  made  of  all  the  competi- 
tive advertising  that  simply  turns  the  consumer 
from  one  establishment  to  another  without  giving 
him  any  added  advantage.  Think  of  the  enormous 
expense  of  advertising  such  a  product  as  Pears' 
soap,  or  the  competing  breakfast  foods.  Some  of 
the  great  magazines  charge  from  $250  to  $400  a 
page  for  a  single  insertion.  In  many  an  instance,  if 
this  expense  of  competitive  selling  could  be  saved, 
the  product  might  be  sold  for  half  the  price. 

Benefits  May  Become  Injuries 

But  all  these  benefits  of  single  management  and 
even  of  monopoly,  if  you  please,  are  turned  into 
injuries  to  society,  if  the  motive  of  the  fortune 
user  is  selfish  and  wrong,  and  if  the  methods  which 
he  employs  are  unscrupulous  and  oppressive. 
[46] 


THE     USING 

From  selfish  motives  comes  the  temptation  to 
dishonesty  in  the  management  of  business,  or  to 
practices  like  adulteration,  injurious  to  the  public, 
which  find  their  ready  excuse  in  custom  and  in 
the  evil  methods  of  others.  No  thoughtful  student 
of  society  questions  that  many  of  the  chief  manag- 
ers of  the  great  insurance  companies,  whose  acts, 
when  viewed  under  the  lime-light  of  the  awakened 
conscience  of  the  public,  now  seem  criminal,  acted 
with  a  clear  conscience  and  even  possibly  with  a 
sense  of  duty  performed  in  the  interests  of  the 
policy-holders.  For  instance,  take  the  case  of  Mr. 
McCall,  the  late  President  of  the  New  York  Life, 
in  connection  with  the  contributions  to  campaign 
funds  or  to  legislative  expenses.  He  had  grown 
accustomed  to  the  thought  that  legislatures  must 
be  controlled  or  bribed,  and  he  justified  his 
deeds  by  what  he  felt  to  be  his  motives.  So, 
too,  when  some  of  the  insurance  managers  acted 
directly  for  their  own  personal  benefit,  it  is 
probable  that  many  of  them  felt,  surrounded 
as  they  were  by  other  men  whose  profits  were 
enormous,  that  their  extravagant  expenses  were 
proper  and  that  their  services  might  well  be  con- 
[47] 


GREAT      FORTUNES 

sidered  worth  a  hundred  thousand  dollars  a  year; 
but  it  has  not  taken  the  public  long  to  find  out 
that  other  men  would  be  willing  and  glad  to  render 
equal  or  better  services  for  a  quarter  that  sum. 
Even  when  they  used  their  official  positions 
and  official  information  to  make  private  profits  for 
themselves  through  their  dealings  with  the  com- 
pany's money,  they  doubtless,  in  many  cases,  felt 
that  they  were  simply  conforming  to  ordinary 
usage,  and  hence  excused  themselves  for  acts 
which  they  evidently  knew  and  felt  to  be  of 
doubtful  morality,  since  they  were  so  careful, 
generally  speaking,  to  conceal  them.  The  social 
benefit  or  injury  of  these  great  fortunes  in 
single  hands  depends  then  .  .  .  ,  largely, 
upon  the  motive  which  impels  those  who  are  man- 
aging or  using  them,  and  the  methods  employed. 
Unless  they  are  used  with  the  most  thoughtful  care 
in  the  interest  of  the  public,  they  arouse  class 
hatred  on  the  one  hand  and  give  rise  to  oppression 
on  the  other;  but  rightly  used  they  may  bring 
pleasure  and  culture  and  refinement  to  their 
owners,  and  education  and  training  to  the 
public. 

[48] 


THE     USING 

Monopoly  is  Sometimes,  Though  Rarely,  Generous 

Even  monopoly  gains  in  the  hands  of  employers 
have  been  used  at  times  in  part  to  increase  the 
wages  of  laborers,  the  employer  feeling  that,  as  his 
gains  from  monopoly  were  large,  it  was  his  duty  to 
share  those  gains  in  some  degree  with  his  working- 
men.  Such  instances  are  perhaps  rare,  but  the  evi- 
dence is  clear  that  even  the  whisky  trust  took  this 
view  when  its  organization  was  first  completed,  al- 
though there  is  no  reason  to  believe  that  this  view 
has  been  retained  throughout  its  most  interesting 
and  tortuous  career.  Much  more  often  has  it  hap- 
pened that  the  power  of  a  great  fortune,  in  a  single 
hand,  has  been  used  to  hold  the  working-man 
down  to  lower  wages  rather  than  to  lift  him  up  by 
sharing  with  him  the  gains,  even  though  such 
gains  were  made  at  the  expense  of  the  public. 

Rich  Men  Serve  the  State  Well  at  Times 

In  the  political  field,  likewise,  the  great  fortunes 
have,  under  our  present  circumstances,  often 
served  a  useful  purpose.  The  fact  has  already  been 
noted  that  our  ambassadors  to  foreign  courts 
cannot  fitly  fill  their  honorable  and  important 
[49] 


GREAT      FORTUNES 

positions  unless  they  possess  large  private  means, 
from  the  income  of  which  they  can  supplement 
their  meager  salaries.  And  yet  some  of  our  rich 
ambassadors  have,  by  virtue  of  this  wealth,  been 
enabled  to  render  to  our  country  most  distinguished 
service  to  which  we  should  accord  full  recognition. 
I  fear  that  it  is  getting  to  be  more  and  more  the 
case  not  merely  in  our  foreign  service,  but  also 
in  our  administrative  work  at  home,  that  it  is  a 
decided  advantage  for  a  person  in  the  public 
service  to  possess  a  large  private  fortune.  The 
expenses  of  living  in  Washington  or  in  many  of 
our  state  capitals  are  such  that  if  a  person  wishes 
to  play  well  his  part  in  the  social  world  into  which 
his  public  position  has  pushed  him,  he  would 
naturally  wish  to  expend  much  more  than  his 
salary.  Even  if  we  put  the  case  not  quite  so 
strongly,  the  advantage  to  the  state,  to  the  public, 
of  some  private  fortunes  is  no  less  clear.  There 
may  be  other  advantages  to  the  public  of  having 
men  in  politics  who  are  independent  of  salary.  They 
cannot  so  readily  be  coerced  by  a  party  boss.  Our 
party  organizations  are  so  powerful  that  no  one 
can  expect  to  secure  an  elective  position,  such  as 
[50] 


THE     USING 

that  of  Congressman  or  even  of  state  Assemblyman, 
unless  he  has  either  the  support  of  the  dominating 
party  in  his  district  or  is  able  himself  to  take  the 
time  and  to  expend  the  energy  and  money  neces- 
sary for  a  thorough  canvass  of  his  district.  If  a 
man  ambitious  to  render  public  service  in  an  offi- 
cial position  must  have  the  income  from  his  office 
in  order  to  live,  he  is  practically  at  the  mercy  of 
the  party  leader;  whereas  if  he  is  a  man  of  inde- 
pendent means,  he  can  much  more  easily  name 
conditions  to  the  party  manager,  or  himself 
dictate  a  policy.  Under  our  present  conditions, 
therefore,  it  is  looked  upon  by  many  —  and  I 
think  none  of  us  will  deny  that  their  view  is  some- 
times just  —  as  a  good  fortune  to  the  state  that 
many  of  our  younger  cultured  men  of  wealth, 
heirs  of  great  fortunes,  are  showing  themselves 
ready  to  devote  their  time  and  their  money  to 
the  public  service.  Some  of  our  ablest  diplomats 
and  administrators  are  of  this  class,  and  we  should 
recognize  their  worth.  It  is  a  misfortune,  we  may 
say,  that  any  man  whose  mental  equipment  and 
training  fits  him  best  for  a  certain  public  position, 
should  not  be  able  financially  to  take  it.  But  it 
[51] 


GREAT      FORTUNES 

would  be  most  unjust  to  assume  that  merely  be- 
cause a  man  has  wealth,  he  has  not  public  spirit 
and  patriotism  and  ability.  When  we  find  men 
with  these  qualifications,  we  may  well  rejoice 
that  by  virtue  of  their  wealth  they  are  able  to  act 
more  independently  and  more  in  the  public  in- 
terest than  would  one  who  must  depend  upon  the 
favor  of  the  party  politician. 

dvantages  of  Wealth  Properly  Used 

Again  we  may  well  glance  back  to  the  wise 
thinkers  of  ancient  Greece,  who  seemed  to  feel  that 
the  highest  good  of  the  state  could  not  be  secured 
unless  there  were  a  leisure  class  of  philosophers 
who,  without  the  care  and  time-consuming  toil 
of  winning  a  livelihood,  could  devote  their  lives 
to  study  and  thought  and  public  service. 
The  only  fault  that  we  can  find  with  such  a 
principle  is  that  those  whose  fortunes  come  to 
them  without  effort,  and  not  as  a  reward,  are  too 
likely  not  to  possess  the  spirit  of  self-sacrifice 
which  is  needed  to  make  the  best  use  of  their 
gifts.  They  are  likely  to  waste  their  time  and  to 
squander  wealth  foolishly  and  to  debauch  others. 
[52] 


THE     USING 

Such  evils  are  doubtless,  relatively  speaking, 
seldom  to  be  found  in  the  generation  of  the  self- 
made  men.  Most  of  them  have  known  what 
struggle  is.  They  have  been  trained  in  the  hard 
school  of  business  and  know  the  absolute  need  of 
business  integrity  and  personal  character;  but 
their  sons  and  grandsons,  if  their  wealth  remains, 
may  well  bring  about  the  evil  effects  of  the  exercise 
of  power  without  the  beneficent  effects  that  come 
from  the  struggle  to  gain  that  power.  The  present 
generation  of  the  wealthy  are,  frequently,  men  of 
moral,  often  of  old-fashioned  religious  lives, 
careful  in  personal  habits,  though  perhaps  often 
indisposed  to  question  the  moral  character  of 
business  practices  in  which  they  have  been  trained. 
Some  of  them,  —  and  it  is  probably  true  that  their 
number  is  increasing — are  inclined  to  take  their 
mere  possession  of  wealth  seriously.  Just  as 
they  have,  for  many  years,  been  asking  what  were 
their  responsibilities,  as  gainers  of  wealth,  to  their 
stock-holders  and  their  employees,  so  now  they 
ask  what  responsibilities  rest  upon  them  as  the 
possessors  of  wealth. 

But  they  nevertheless  have  natural  affections. 
[53] 


GREAT      FORTUNES 

While  they  may  give  freely  of  their  income  for  char- 
ity and  for  public  purposes,  they  are  not  likely  to 
forget  their  sons  and  their  daughters ;  nor,  again, 
are  they  likely  to  be  ready  to  lay  down  their  power. , 
They  will  rather  wish  to  transmit  this  power  to^ 
those  who  follow  them,  and  who  not  having  been 
trained  in  the  same  severe  and  rigid  school  of 
experience  are  likely  to  hold  more  lightly  their 
responsibilities. 

Advantages  and  Dangers  of  Endowments 
by  the  Rich 

It  is  impossible  to  avoid  this  difficulty,  but 
something  more  might  perhaps  be  done  to  secure 
for  the  public  good  the  services  of  men  of  little 
wealth.  Some  provision  might  be  made  by  the 
state  through  adequate  salaries  and  relative 
permanency  of  tenure,  as  is  indeed  now  some- 
times done  indirectly.  Provision  might  also  be  made 
by  private  endowment,  as  in  the  case  of  university 
chairs,  or,  as  was  done  in  the  days  of  Cicero,  by 
wealthy  patrons.  But  we  need  to  be  careful  to  avoid 
the  dangers  of  patronage.  We  surely  do  not  want  in 
our  day  to  see  a  rich  man  surrounded  by  such  a 
[54] 


THE     USING 

throng  of  sycophants  and  parasites  waiting  to  secure 
something  of  their  master's  bounty  as  was  to  be  seen 
in  ancient  Rome.  We  do  not  want  our  literary  men 
or  our  political  thinkers  to  be  patronized  by  wealthy 
men  of  culture  who  would  keep  them  practically  as 
retainers  and  dependents,  as  was  customary  in  the 
days  of  Lorenzo  di  Medici  or  Queen  Elizabeth.  For- 
tunately at  times  now  there  are  wealthy  men  who 
are  willing  to  endow  professors'  chairs  or  univer- 
sities or  institutes  for  scientific  research,  with  no 
conditions  excepting  that  the  trustees  of  the  gift 
shall  try  to  find  the  best  men  to  carry  on  the  work. 
Generally  such  endowments  are  for  institutions 
only;  but  sometimes  in  the  days  of  the  Roman 
Republic  they  were  personal.  A  man  who  devoted 
his  life  to  the  public  service  in  a  political  way 
might  be  endowed,  so  that  he  could  give  himself 
freely  to  his  life  work  without  care  for  personal 
needs.  It  is  said  that  in  recognition  of  his  great 
public  services  and  his  self-sacrificing  boldness 
in  defending  unpopular  causes,  Cicero  re- 
ceived at  one  time  and  another  by  will  and 
personal  gift,  not  less  than  a  million  dollars 
Possibly  the  time  may  yet  come  here  when  a 
[55] 


GREAT      FORTUNES 

wealthy  public-spirited  citizen,  instead  of  endowing 
an  institution  or  founding  a  professor's  chair, 
may  find  some  man  of  promise  and  devotion  to  the 
public  service  whose  character  and  aims  are  such 
that  he  would  not  abuse  his  trust,  and  will  endow 
him  with  a  life  income  sufficient  to  enable  him  to 
do  his  best  public  service  without  wasting  his 
energies  on  bread-winning.  A  life  annuity  might 
thus  be  well  suited  to  the  public  interest.  The 
only  instance  of  the  kind  that  I  have  known  in 
modern  times  is  the  provision  made  recently  by  such 
an  endowment  to  put  Booker  T.Washington  during 
his  lifetime  beyond  care  for  the  future  so  far  as 
the  personal  wants  of  himself  and  his  family 
were  concerned.  The  purpose  and  the  plan  are 
right.  And  in  the  case  of  men  like  Booker  Wash- 
ington, whose  characters  have  been  tested,  there 
could  be  no  better  endowment.  But  the  men  should 
be  selected  with  very  great  care. 

Politically,  also,  we  must  recognize  the  great 
services  of  wealth  in  establishing  and  maintaining 
the  power  of  a  great  country  abroad.  The  influence 
of  the  United  States  in  the  world's  councils  at  the 
present  day  depends  to  no  small  extent  upon  the 
[56] 


THE     USING 

wealth  of  the  country  and  upon  evidences  of  that 
wealth  as  seen  in  rich  Americans  who  are  making 
worthy  use  of  their  possessions. 

While  we  may  thus  indicate  useful  ways  in 
which  our  great  fortunes  are  used  politically,  we 
must  not  fail  to  mention  (our  magazines  will  not 
let  us  forget )  the  baleful  uses  of  these  great  for- 
tunes in  bribery  and  corruption  which  has  made 
many  of  our  state  and  city  governments  a  hissing 
and  a  byword. 

The   Aristocracy    of    Wealth 

What  is  the  more  general  social  effect  of 
these  great  fortunes  ?  We  hear  in  a  great  many 
cases  of  our  aristocracy  of  wealth.  And  there  can 
be  no  doubt  that  in  one  sense,  though  not  the  high- 
est, our  very  wealthy  people  do  form  an  aristoc- 
racy whose  doings  are  chronicled  in  the  daily 
press  as  if  the  doings  were  of  public  importance. 
They  are  of  interest  to  many  readers  or  they  would 
not  be  so  chronicled.  I  fear  that  the  chief  result 
from  the  creation  of  such  an  aristocracy  is  found 
in  class  jealousies  and  in  the  misjudgment  on  the 
part  of  the  very  rich  themselves  of  the  real  nature 
[57] 


GREAT      FORTUNES 

and  the  real  excellencies  of  those  who  belong 
to  other  classes.  But  we  should  recognize  also 
that  a  proper  use  of  wealth  may  easily  secure  an 
aristocracy  of  culture  and  refinement  which  can 
be  found  only  among  people  who  possess  at  least 
a  modest  competence  and  who  do  not  have  to 
spend  their  time  in  earning  their  bread. 

The  Idle  Rich 

The  idle  rich,  fortunately  in  America  only  a 
small  class,  mostly  those  who  have  inherited  their 
wealth  ( not  the  wealth-getters,  but  those  who, 
from  the  chronicles  of  their  doings,  are  largely 
wasting  their  time  in  a  frantic  desire  to  be  amused), 
are  mere  parasites  on  the  body  politic.  Their  ex- 
istence is  useless  rather  than  seriously  harmful  to 
society  and  their  chief  social  and  political  func- 
tion seems  to  be  to  set  envy  and  anti-social 
extremists  at  work.  It  is  unfortunate  that  all  can- 
not recognize  the  really  slight  consequence  of 
such  idle  rich  persons  in  the  great  mass  of  soci- 
ety, but  it  is  doubtless  a  fact  that,  where  great  for- 
tunes are  used  chiefly  for  the  gratification  of  vanity 
and  the  desire  for  pleasure,  the  rich  become  a  dan- 
[58] 


Y 

- 


THE     USING 

gerous  element  in  the  community.  They  are  one  of 
the  chief  causes,  if  not  the  chief  cause,  why  the 
less  thoughtful  and  more  passionate  classes  at  the 
other  extreme,  with  a  feeling  that  matters  could 
be  no  worse,  and  with  the  hope  that  in  any  new 
form  of  organization,  wealth  would  be  more 
evenly  and  justly  distributed,  are  ready  to  take 
rash  steps  toward  the  violent  overthrow  of 
present  society. 

There  must  always  be  in  society  classes;  the 
variety  in  human  nature  is  too  great  for  all  to 
belong  to  one  class.  There  will  be  many  classes 
and  the  distinctions  between  them  will  be 
great;  but  great  fortunes  draw  the  distinctions 
between  the  classes  on  a  false  and  unsocial 
basis.  The  fact  that  the  rich  are  very  rich 
tends  to  make  many  people  believe  that  the  poor 
are  continually  growing  poorer,  even  though  the 
standard  of  life  is  steadily  rising.  This  class  dis- 
tinction, based  on  wealth,  and  dangerous  on  ac- 
count of  the  actions  of  the  idle  rich,  is  one  great 
evil  to  be  found  from  the  accumulation,  and  par- 
ticularly from  the  inheritance,  of  great  for- 
tunes. 

[53] 


GREAT     FORTUNES 

The  Social  Classes 

But  is  it  true,  as  has  been  so  often  asserted,  that, 
under  modern  economic  conditions,  the  rich  are 
continually  growing  richer,  while  the  poor  are  grow- 
ing poorer  ?  Is  it  true  that  society  is  being  separated 
into  these  two  great  economic  classes  one  of  which 
dominates  the  other  and  between  which  there 
is  a  continually  widening  cleft?  In  one  sense  the 
statement  is  probably  true;  in  the  other  and  much 
more  significant  sense  the  statement  is  undoubtedly 
false.  If  a  hundred  years  ago,  in  the  United  States, 
the  wealthiest  man  was  worth,  perchance,  a 
million,  while  the  poor  man  had  but  enough  to 
keep  him  from  starvation,  the  difference  in  their 
wealth,  as  measured  by  cash,  was  substantially  a 
million  dollars.  If  at  the  present  time  our  wealthiest 
man  is  worth,  let  us  say,  five  hundred  millions  of 
dollars,  while  the  poor  man  still  has  his  living  in  ac- 
cordance with  our  present  standards  of  comfort, 
the  difference  measured  by  dollars,  instead  of  one 
million  is  substantially  five  hundred  millions  and 
the  cleft  seems  wider.  But  if,  on  the  other  hand, 
we  measure  the  distance  between  the  two  by 
standards  of  comfort,  opportunities  for  culture, 
[60] 


THE     USING 

chances  for  living  the  higher  life,  the  cleft  instead 
of  widening  has  been  rapidly  narrowing  during 
the  last  hundred  years.  The  fairly  diligent,  thrifty 
laborer  of  good  habits  to-day  has  a  home  better 
warmed,  better  lighted,  more  comfortably  furnish- 
ed than  were  the  palaces  of  Queen  Elizabeth  or  of 
Louis  XIV,  although,  of  course,  there  is  less 
display  of  gold  embroidery  and  of  silverware 
and  jewels.  At  the  present  time,  a  skilled  me- 
chanic, if  thrifty  and  diligent,  may  live  in  com- 
fort at  home,  surrounded  by  all  that  is  necessary 
for  health,  with  enough  of  the  best  literature,  if  he 
has  taste  to  care  for  that,  to  make  him  learned  in 
the  thoughts  of  the  great  philosophers,  poets,  and 
historians,  and  with  enough  left  to  put  into  in- 
surance so  that  he  need  not  fear  the  pinch  of 
absolute  poverty  when  his  working  days  are  over. 
Of  course  I  am  speaking  of  the  better  class  of 
diligent,  skilled  workmen,  and  I  compare  them 
with  the  wealthiest  men  of  to-day  as  compared 
with  the  wealthiest  men  of  a  hundred  years  ago. 
The  wealthy  man  of  to-day  may  have  his  steam 
ocean-going  yacht  and  his  private  car,  may  spend 
his  many  thousands  upon  a  single  banquet,  may 
[61] 


GREAT     FORTUNES 

take  up  forestry  as  a  pastime  on  his  own  private 
estate,  —  and  in  these  ways  the  differences  between 
his  expenditures  and  those  of  the  poor  man  are 
greater  than  were  those  a  hundred  years  ago. 
But  the  differences  in  the  essentials  for  living 
a  life  of  health,  strength  and  genuine  culture  are 
far  less  now  than  they  were  then.  This  fact,  too,  of 
the  steady  raising  of  the  standards  of  living  of  the 
poorer  people  is  due  in  no  small  degree  to  the 
great  inventions  of  modern  days  which  have  led  to 
the  consolidation  of  wealth,  and  to  the  added 
power  of  production  which  has  come  to  a  con- 
siderable extent  through  this  consolidation  and 
the  consequent  concentration  of  industrial  energy. 

Do  Monopolies  Destroy  Opportunities  for  Able  Men? 

And  is  it  true  that  the  great  combinations  of 
capital,  from  which  often  spring  the  great  fortunes, 
have  shut  out  from  the  man  of  executive  ability 
but  of  small  capital  the  power  to  start  an  indepen- 
dent business  and  to  live  out  his  industrial  life 
free  from  the  dictum  of  a  master?  Doubtless  in 
certain  great  lines  of  industry,  such  as  sugar  refin- 
ing or  steel  manufacture,  the  small  man  with  a 
[62] 


THE     USING 

few  hundred  or  a  few  thousands  of  dollars  cannot 
start  in  competition  with  his  great  rivals;  but 
probably  in  the  great  majority  of  industries, 
if  we  go  by  number,  not  by  prominence,  and 
especially  in  those  which  require  individual  taste 
in  the  manufacturer,  or  the  satisfaction  of 
individual  taste  in  the  consumer,  the  oppor- 
tunities are  still  open.  An  individual  with  no  capi- 
tal, if  he  has  the  requisite  taste  and  skill,  may  still 
become  famous  as  an  architect,  a  house  decorator, 
a  milliner,  a  dressmaker,  a  builder  of  artistic 
furniture,  a  caterer,  as  well  as  a  practitioner  of 
law  or  medicine.  An  acquaintance  with  a  clientage 
of  wealthy  men  may  give  one  a  start,  but  after  all 
it  is  the  ability  and  the  recognition  of  the  public 
needs  that  makes  the  ultimate  success.  Consolida- 
tion of  capital,  then,  may  in  certain  narrow  lines 
restrict  the  opportunities  for  independent  work, 
but  the  wider  reaches  of  the  field  of  opportunity 
are  still  open. 

Probably  never  before  to-day  has  the  opportunity 

been  so  good  for  young  men  of  really  great  capacity 

to  attain  high  position  in  industrial  life  as  directors 

of  great  enterprises.  In  earlier  times,  a  man  could 

[63] 


GREAT      FORTUNES 

found  a  business  and  hand  it  down  from  generation 
to  generation,  fairly  confident  that  his  sons  and 
grandsons  even  though  possessed  of  but  moderate 
talents,  could  make  their  living  respectably.  And  s 
he  might  also  feel  confident  that  even  though  their 
talents  were  great,  the  business  was  still  likely 
to  be  moderate.  At  the  present  time,  the  man  of 
really  great  ability  may  start  at  the  bottom,  but 
so  keen  is  the  competition  and  so  boundless  are 
the  opportunities,  so  eager  are  possessors  of  great 
capital  to  find  the  men  who  can  wield  its  power 
most  successfully,  that  the  boy  who  fulfills  his 
task  better  than  the  others  of  his  class  is  sure  to  be 
promoted.  So  certain  is  this  promotion  from  grade 
to  grade,  from  position  to  position,  on  account  of 
the  stress  of  competition,  that,  provided  one 
shows  himself  worthy,  the  man  of  greatest 
ability  is  not  likely  long  to  lack  opportunity  for 
making  the  best  use  of  all  his  power.  Even  at  the 
present  time,  name,  influence,  family  connections 
will  give  a  young  man  a  start.  That  is  human 
nature.  But,  if  he  has  not  in  him  the  capacity 
or  the  willingness  for  greater  work,  his  position 
in  the  industrial  world  will  always  remain  sub- 
[64] 


THE     USING 

ordlnate  whatever  it  may  be  in  circles  devoted  to 
amusement.  On  the  other  hand,  although  the  man 
of  really  first  grade  qualities  may  need  to  start 
lower  and  wait  somewhat  longer  for  his  first  re- 
cognition, he  is  bound  to  be  pushed  forward  under 
the  pressure  of  business  necessity  into  any  place 
for  which  he  is  fitted.  Probably  never  before  in  any 
country  or  at  any  time  in  the  world's  history  have 
the  opportunities  been  so  many  or  the  success  so 
assured  or  the  prizes  so  great  for  the  man  of  really 
commanding  capacity  as  in  the  United  States  at 
the  present  day. 

The  Effects  of  Working  Under  Orders 

Much  is  said  of  the  necessity  at  the  present 
time  of  a  man's  working  under  orders,  whereas 
formerly  he  could  manage  a  business  independent- 
ly; and  much  is  said  of  the  dwarfing  effects  of 
thus  working  under  control;  but  this  pessimistic 
view  of  the  circumstances  is  a  short-sighted  one, 
and  does  not  recognize  all  the  conditions  in  an 
impartial  way. 

We  ought  not  to  overlook  the  undoubted  fact 
that  at  all  periods  of  the  world's  history,  in  early 
[65] 


GREAT      FORTUNES 

days  and  in  other  countries,  even  more  than  at 
present  in  our  own  country,  the  great  mass  of  the 
workers  have  served  under  the  direction  of  others. 
Probably  at  the  present  time  nine  out  of  ten  of 
those  who  start  into  an  independent  business  find 
that  they  are  incapable  of  making  headway  against 
their  competitors. They  either  fail  or  gradually  with- 
draw from  their  business  with  loss,  or  they  toil 
along  through  years  with  no  reward  beyond  that 
of  the  barest  living.  This  has  always  been  true. 
The  men  most  difficult  to  find  are  those  of  real 
executive  ability,  men  who  are  capable  of  directing 
their  own  work  and  that  of  others.  For  such  men 
the  consolidations,  the  great  fortunes,  offer  oppor- 
tunities, different  to  be  sure  from  those  of  earlier 
days,  but  no  less  important,  and  those  which  do 
not  prevent  the  full  development  of  the  powers 
of  initiative.  A  superintendent  of  a  department 
in  Wanamaker's  store,  the  superintendent  of  one 
of  the  plants  of  the  United  States  Steel  Cor- 
poration, the  general  traffic  manager  of  a  great  rail- 
road, the  head  of  a  great  bank,  the  president 
of  a  great  university,  are  all  working  under 
the  direction  of  others,  are  all  in  subordinate 
[66] 


THE     USING 

positions ;  and  yet  all  of  them  are  given  full  power 
of  initiative.  They  have  every  opportunity  of 
showing  their  originality;  they  have  every  oppor- 
tunity of  directing  their  own  work  so  long  as  their 
direction  is  intelligent  and  their  work  successful. 
Even  men  in  much  more  subordinate  positions, 
while  they  must  work  in  harmony  with  others, 
while  they  cannot  undertake  new  plans  without 
consultation  or  permission,  are  nevertheless  so 
situated  that  every  valuable  idea  will  be  eagerly 
taken  and  responsibility  given  in  proportion  to 
the  capability  of  bearing  it.  Is  there  humiliation 
for  the  president  of  a  railroad  or  of  a  bank  in  being 
under  a  board  of  directors?  He  is  expected  to 
lead  rather  than  to  follow  them,  and  while  he  is 
held  responsible,  while  he  must  show  results, 
no  hampering  restrictions  are  placed  upon  him. 
It  is  an  art,  —  one  well  worthy  of  being  developed, 
—  to  learn  how  to  guide  one's  course  so  wisely 
as  to  meet  the  approval  of  one's  superiors.  The 
man  who  stands  entirely  independent  must  watch 
as  carefully  the  acts  of  his  competitors,  and  if  he 
fails,  instead  of  receiving  suggestions  and  warnings 
from  a  board  of  directors,  he  receives  rather  a 
[67] 


GREAT      FORTUNES 

summons  to  the  bankrupt  court  at  the  suggestion 
of  his  creditors.  There  is  a  mistaken  idea  with 
reference  to  the  opportunities  for  initiative  and  for 
self -direction  given  to  people  who  are  working  in 
the  service  of  others.  Responsibility  to  others  by  no 
means  implies  subservience  or  weakness  of 
character. 

The  Independence  of  Character  of  the  Worker 

The  situation  in  the  United  States  at  the  present 
time  seems  to  prove  well  enough  this  contention. 
In  no  other  country  is  there  such  consolidation  of 
wealth;  in  no  other  country  are  corporations  so 
powerful;  and  yet  probably  in  no  other  country  is 
there  so  much  independence  of  character  as  in  the 
United  States  at  the  present  day.  In  no  other  coun- 
try and  at  no  other  time  in  our  own  country  have 
the  protests  against  what  might  be  considered  re- 
striction of  speech  or  restriction  of  action  been  so 
vigorous  as  at  the  present  time.  We  hear  charges  of 
attempts  at  the  restriction  of  freedom  of  speech  in 
our  great  universities.  In  my  own  judgment,  the 
charges  are  almost  absolutely  without  foundation, 
but  the  fact  that  the  protests  are  made  and  that  the 
[68] 


THE     USING 

feeling  of  the  danger  of  such  restriction  is  so  wide- 
spread is  a  most  encouraging  sign,  and  is  in  itself 
a  proof  of  the  independence  of  our  spirit.  Where 
else  and  at  what  other  time  in  our  own  history 
have  working-men  been  on  the  whole  so  free  to 
combine,  so  ready  to  protest  against  needless  re- 
strictions on  the  part  of  their  employers, 
so  able  to  fight  their  own  battles?  Our 
trade  unions,  organized  with  their  hundreds  of 
thousands,  even  millions  of  members,  are  well 
capable  of  holding  their  own  against  our  capitalists 
organized  with  their  billions  of  money.  The 
consolidation  of  capital  has  so  far,  at  any  rate,  not 
weakened  the  spirit  of  freedom  on  the  part  of  our 
wage-earners.  Moreover,  there  is  every  reason  to 
believe  that  the  consolidations  of  capital,  dealing 
with  the  consolidations  of  the  laborers  through 
systems  of  conciliation  and  trade  agreements,  will 
very  soon  lessen  more  and  more  the  spirit  of  war- 
fare which  has  heretofore  been  so  rife  between 
these  classes.  This  system  will  tend  more  than 
has  ever  before  been  the  case  to  give  freedom 
to  the  individual  so  far  as  he  himself,  bound  by  his 
sense  of  duty  and  responsibility,  places  a  rein  upon 
[69] 


GREAT      FORTUNES 

himself  and  a  check  upon  his  own  lawlessness. 
Self-restraint,  after  all,  if  evil  methods  are  checked, 
gives  the  only  freedom  industrially,  politically 
or  spiritually.  The  consolidation  of  wealth,  bring- 
ing about,  as  it  certainly  has  done,  vastly  in- 
creased opportunities  for  self-development,  may, 
perhaps,  work  rather  toward  this  self-restraint 
of  the  individual  than  toward  the  mastery,  in  any 
evil  sense,  of  the  individual  by  others. 

The  Responsibility  of  the  Rich 

Again,  we  must  not  overlook  the  fact  that 
with  great  fortunes  comes  often  a  feeling  of  re- 
sponsibility for  the  wise  use  of  those  fortunes,  and 
this  responsibility  is  made  evident  in  their  use  for 
the  public  good.  The  endowment  of  colleges,  of 
art  museums,  of  public  libraries,  is  not  to  be  com- 
mended if  in  any  sense  such  endowments  are 
made  with  the  idea  of  hoodwinking  the  public 
regarding  evil  purposes,  nor  if  the  gift  is  in 
any  sense  to  excuse  the  methods  employed  in 
obtaining  ill-gotten  gains;  but  there  is  no  reason 
why  such  endowments  should  not  be  absolutely 
free,  as  most  of  them,  so  far  as  I  know,  all  of  them, 
[70] 


THE     USING 

are.  With  such  use  of  the  great  fortunes,  there 
may  be  given  to  the  public  benefits  such  as 
could  not  come  from  smaller  gifts  and  could  other- 
wise be  secured,  if  secured  at  all,  only  through 
the  action  of  the  state.  If  we  may  judge  by  the 
history  of  the  past,  as  well  as  from  the  experience 
of  the  present  in  our  own  country,  many  of  the 
means  of  culture  now  freely  open  to  all  classes  in 
the  community  would  be  wanting,  if  we  were  to 
trust  solely  to  the  intelligence  and  the  foresight  of 
the  public  as  manifested  by  the  actions  of  legisla- 
tors. Often  the  wisest  use  to  make  of  wealth 
is  to  put  it  into  productive  business  where  it  ren- 
ders service  to  society  by  added  wages,  added  com- 
forts for  all  classes,  especially  the  poor,  through 
increase  of  production  for  consumption  and 
wider  distribution  of  these  products  among  all 
classes.  But  more  direct  gifts  to  the  public  are 
not  to  be  overlooked  nor  condemned. 

The  Great  Fortune  a  Public  Trust  or  a  Menace 

There  can  be  no  doubt  that  a  great  fortune, 
however  accumulated,  should  be  considered  chiefly 
as  a  trust  for  the  public.  Each  of  us  really  owes  his 
[71] 


GREAT      FORT UN ES 

all  to  the  state  that  has  made  civilization  possible. 
Without  it  there  would  be  no  great  fortunes,  no 
safe  living.  There  is  no  reason  why  the  public 
should  not  accept  the  gift  of  a  great  fortune  given 
from  good  motives.  On  the  other  hand,  the  ques- 
tion naturally  crowds  forward  as  to  whether  the 
public  can  properly  seize  the  great  fortune  if  it 
is  not  freely  offered.  There  can  be  no  doubt  that 
a  great  fortune  used  selfishly  tends  to  make  a 
greater  fortune,  and  that  tends  to  make  a  monop- 
oly. It  is  becoming  essential,  it  even  has  become 
essential,  that  in  some  way  the  public  should 
control  or  put  limits  to  the  methods  of  getting  and 
to  the  use  made  of  the  great  fortunes. 

The  Public  Control  of  Fortunes 

SHALL  WE  LIMIT  THEIR  AMOUNT  BY  TAX  OR 
OTHERWISE  ? 

The  question  is  often  asked  whether,  since 
great  fortunes  may  be  used  to  the  public  detri- 
ment, the  state  should  prevent  their  growth  or 
whether  it  should  attempt  to  control  them.  It  is 
feared  that ,  unless  the  state  takes  some  active 
measures,  the  holders  of  the  great  fortunes  will 
[72] 


THE     USING 

control  the  state  and  the  public.  If  what  has  been 
said  heretofore  is  true,  determined  efforts  should 
be  made  to  prevent  the  accumulation  of  great 
fortunes  by  means  detrimental  to  the  public  in- 
terest,—  not  because  they  are  great,  but  because 
injurious  methods  are  employed.  On  the  other 
hand,  they  may  be  tolerated,  they  even  may  be 
encouraged,  when  they  are  made  by  legitimate  and 
proper  means,  so  that  they  are  in  the  nature  of 
reasonable  payments  for  services  actually  rendered 
to  the  public.  There  is  no  harm  in  great  fortunes 
themselves  either  in  the  process  of  accumulation 
or  in  the  unified  management,  so  long  as  methods 
employed  are  proper  and  wise  use  is  made  of  them. 
Rather,  as  we  have  seen,  they  may  be  of  great 
benefit  to  the  public.  There  seems  to  be  no  reason 
then,  in  the  nature  of  the  case,  for  any  action  which 
shall  amount  to  the  confiscation  of  all  profits  when 
the  fortune  has  reached  a  certain  limit;  the  restric- 
tion should  rather  be  on  the  method  of  accumu- 
lation. I  do  not  mean  to  say  that  such  a  measure 
as,  for  example,  a  progressive  tax,  even,  under  some 
circumstances,  a  progressive  income  tax,  may  not 
in  itself  be  wise.  I  think  that  in  many  cases  it  is; 
[73] 


GREAT     FORTUNES 

but  the  principle  of  increasing  the  tax  in  that 
case  depends  upon  the  increased  ability  to  pay, 
and  that  principle,  not  the  desire  to  check  the 
growth  of  the  fortune,  would  fix  the  limit  of  the 
tax. 

Great  Fortunes  Should  Be  Secured  to  Public  Uses 
TAXING  FOR  THE  PUBLIC  TREASURY. 

It  is  also  desirable,  of  course,  that  in  the 
long  run  the  great  fortunes  be  by  conservative 
normal  ways  secured  to  public  uses.  Various 
suggestions  in  this  direction  have  been  made. 
We  have  already  in  this  country  attempted  to 
prevent  the  holding  of  great  estates  by  the  aboli- 
tion of  mortmain  and  prohibition  of  the  right  of 
entail,  so  that  while  a  wealthy  man  may  give 
practically  all  of  his  estate  to  his  heir,  he  can- 
not determine  that  for  generations  this  estate 
must  remain  in  the  family.  There  seems  to  be  of 
late  years,  to  be  sure,  a  tendency  in  this  country 
for  large  fortunes  to  remain  in  the  family  for 
several  generations;  but  that  tendency  is  not 
pronounced,  and  the  distribution  of  a  fortune 
among  several  people  very  generally  occurs  on 
[74] 


THE     USING 

the  death  of  the  fortune  builder.  Would  it  be  wise, 
as  has  been  proposed,  to  limit  the  amount  devised 
to  a  single  person  or  a  single  family  ?  Possibly  at 
some  time,  but  I  think  not.  The  remedy  would 
probably  be  worse  than  the  evil.  The  abuses  of 
inheritance  are  not  great  now;  the  chief  dangers 
to  society  of  great  fortunes  so  far  seem  to  be  from 
corporations  not  from  individual  fortunes  after 
they  are  beyond  the  control  of  the  one  man  who 
is  dominating  a  corporation.  The  holding  of  great 
fortunes  in  the  form  of  stocks  and  bonds  makes 
their  distribution  easy.  We  wish  to  hamper  indi- 
vidual initiative  and  action  as  little  as  possible 
and  still  protect  the  public.  Something  may  be 
done  to  bring  about  the  needed  protection  with- 
out a  rigid  limitation  of  the  amount  devised. 

Our  inheritance  laws  have,  on  the  whole,  now, 
a  powerful  tendency  toward  a  wider  distribution 
of  fortunes,  and  this  may  be  encouraged.  Again, 
a  progressive  inheritance  tax  which  tends  to  put 
into  the  public  treasury  a  small  percentage  of 
every  large  fortune  on  the  death  of  its  owner 
looks  in  the  same  direction.  I  cannot  take  the  space 
to  discuss  here  in  detail  the  principle  of  the  in- 
[75] 


GREAT      FORTUNES 

heritance  tax,  but  it  is  the  general  opinion  of  the 
best  thinkers  that  such  a  tax  at  reasonably  high 
rates,  and  at  rates  that  shall  increase  with  the  size 
of  the  fortune,  is  one  of  the  best  taxes  in  the  public 
interest  that  has  yet  been  devised.  Even  though 
the  rate  is  high,  there  is  no  noticeably  injurious 
tendency  to  prevent  thrift  and  activity  in  busi- 
ness enterprise.  This  tax  might,  perhaps,  be  in- 
creased on  the  largest  fortunes.  The  heirs  would 
not  suffer  appreciably. 

We  Can  Check  Wrong  Methods  of 

Accumulation 

Of  course  the  crude  suggestion  sometimes  made 
that  all  great  fortunes  should  be  distributed  among 
the  public  may  be  passed  over  with  practically 
no  comment.  If  other  conditions  remain  as  at 
present,  such  a  distribution  would  be  of  no  service 
in  the  long  run.  The  fortunes,  especially  those  that 
are  accumulated  by  means  detrimental  to  the 
public  interest,  would  soon  drift  back  largely  into 
the  hands  of  the  original  owners.  On  the  other 
hand,  if  means  could  be  found  by  which  the 
process  of  accumulation  by  illegitimate  or  harmful 
methods  could  be  prevented,  there  would,  beyond 
[76] 


THE     USING 

question,  result  a  much  more  even  distribution  of 
wealth  among  the  members  of  the  community. 
Such  distribution  would  probably  bring  with  it 
a  better  standard  of  life  among  the  poorer 
classes,  and  this  would  be  extremely  beneficial 
to  the  country  as  a  whole.  And  such  measures 
will  gradually  be  worked  out.  So  far  as  we  can  - 
see  at  the  present  time,  such  measures  are 
mainly  those  which  encourage  honorable  thrift 
in  the  community,  and  which  tend  to  prevent 
dishonest  and  dishonorable  practices  of  all  kinds, 
whether  in  the  nature  of  special  favors  as  rail- 
road rebates  or  avoidance  of  heavy  tax  burdens 
or  stock  gambling,  improper  buying  and  selling 
of  stocks,  or  using  unfairly  against  a  competitor 
information  of  a  confidential  nature  by  what- 
ever means  secured,  i.  £.,laws  securing  a  fair  deal. 

Socialism  Could  Not  Make  the  Able  Men  Unselfish 

Of  course  the  solution  of  the  difficulty  proposed 
by  some  of  the  radicals  is  socialism  which  will 
take  all  the  important  tools  and  means  of  produc- 
tion from  the  hands  of  individuals  and  place  them 
in  the  control  of  the  Government  to  be  used 
[77] 


GREAT      FORTUNES 

for  the  benefit  of  the  people  at  large.  Here, 
again,  it  is  not  the  time  to  argue  the  question.  But 
most  of  our  socialists  seem  to  ignore  the  fact  that 
our  governments  are  made  up  of  individual  men 
who  have  the  same  passions,  the  same  desires, 
noble  and  base,  as  other  men;  and  that  in  every 
society  the  great  mass  of  the  people  are  to  a 
considerable  extent  controlled  by  the  few  domi- 
nating personalities.  Under  our  present  organi- 
zation of  society  in  a  democratic  country  like 
the  United  States,  where  the  chief  prizes  seem  to 
be  in  private  industry,  these  dominating  personali- 
ties are,  with  many  individual  exceptions,  in 
business,  and  are  accumulating  great  fortunes 
for  their  own  special  use.  When  we  consider 
human  nature,  we  can  see  that  in  the  socialistic 
state  where  the  means  of  production  were  in  the 
hands  of  the  Government,  these  same  personalities 
would  probably  control  as  well  as  in  the  individ- 
ualistic state  of  the  present  day.  If  these  men  are 
working  to-day  from  selfish  motives,  there  seems 
little  reason  to  believe  that  in  a  socialistic  state 
they  would  work  from  higher  motives ;  and  it  would 
probably  be  as  easy  for  them  to  secure  positions 
[78] 


THE     USING 

as  state  officials  in  the  socialistic  state  as  now  to 
control  industrial  society.  As  state  officials  they 
could  as  easily  (or  more  easily)  manipulate  the  Gov- 
ernment so  as  to  give  to  themselves,  in  the  guise  of 
office-holders,  the  use  of  the  great  fortunes,  as  to 
secure  them  now  as  private  individuals.  Note  the 
acts  of  the  South  Carolina  legislature  in  reconstruc- 
tion days; note  the  luxury  of  rulers  in  many  states. 
I  welcome  the  present  tendency  toward  government/ 
ownership  and  management  of  certain  public  utili- 
ties, particularly  in  the  great  cities,  because  I  think 
this  will  afford  us  an  excellent  opportunity  of 
gaining  practical  experience  in  public  manage- 
ment of  capitalistic  enterprises.  We  can  from  such 
experience  better  judge  what  the  effect  of  such 
management  is  likely  to  be  upon  both  the  ac- 
cumulation of  capital  and  the  welfare  of  the 
public,  without  taking  the  risk  —  a  grave  risk  — 
of  the  adoption  of  a  general  policy  of  public 
ownership.  We  can  then  see  how  far  it  is  likely 
to  prove  wise  to  extend  this  system  of  public 
ownership.  If  the  experiments  prove  success- 
ful in  many  cases,  we  may  carry  the  provisions 
much  farther  than  we  at  present  contemplate; 
[79] 


GREAT      FORTUNES 

but  until  we  can  gradually  bring  about  in  some 
way  a  modification  of  the  form  of  ambition  which 
leads  on  our  strongest  men,  I  see  no  great  promise 
of  good  in  any  such  solution  of  this  social  problem, 
and  I  see  many  dangers. 

How  Can  the  Able  Men  Be  Kept  in  the  Service 
of  the  State? 

President  Eliot  and  Professor  Taussig  of  Har- 
vard in  late  addresses  have  made  important  sugges- 
tions in  this  connection.  President  Eliot  is  of  the 
opinion  that,  granted  a  liberal  livelihood,  the  best 
men  will  do  their  work  best,  chiefly  from  love  of 
the  work  and  of  the  power  that  comes  with  an 
important  position;  while  Professor  Taussig 
hopes  that  in  time  we  may  get  many  of  our  ablest 
and  most  conscientious  business  men  to  go  into 
political  life  by  making  official  salaries  somewhat 
larger  so  as  to  guarantee  a  suitable  living ;  by  making 
the  tenure  of  office  more  secure,  so  that  a  good  man 
could  afford  to  give  up  private  business  without 
too  great  risk;  and  by  giving  greater  social  dis- 
tinction to  holders  of  public  office,  a  distinction 
which  would  naturally  come  from  higher  salaries 
[80] 


THE     USING 

and  longer  tenure  and  the  drafting  into  that  ser- 
vice of  a  higher  type  of  men  than  now  come  — 
excepting  the  wealt* 

Public  Opinion  the  Controlling  Force 

Finally,  it  seems  that  after  all,  whatever  may  be 
the  form  of  solution  of  our  social  difficulties  in 
connection  with  great  fortunes,  everything  ulti- 
mately rests  upon  the  cultivation  of  a  public  senti- 
ment which  shall  unsparingly  condemn  dishonest 
and  dishonorable  and  selfish  motives  and  methods 
in  the  accumulation  of  wealth,  and  which  shall 
encourage  public  spirit.  Under  the  pressure 
of  such  a  public  opinion  those  who  have 
accumulated  great  fortunes  will  keep  the  public 
interest  in  mind,  and  if  their  wealth  be  used  wisely 
and  unselfishly,  there  will  be  from  them  no  danger 
to  the  public,  but  only  benefit. 

In  the  ultimate  analysis  every  great  social  re- 
form comes,  not  by  legislative  decree,  but  by 
converting  the  minds  and  hearts  of  the  citizens. 
When  this  is  done,  right  laws  will  be  passed 
and  enforced;  otherwise  not.  The  growth  of 
the  democratic  idea  has  been  a  matter  of 
[81] 


GREAT      FORTUNES 

centuries;  the  abolition  of  slavery  had  first  to  be 
determined  by  public  sentiment,  then  the  rulers 
acted.  By  the  time  the  public  is  ready  for  intelli- 
gent and  positive  measures,  severe  compulsory 
acts  will  be  little  needed  and  the  necessary  ones 
will  be  readily  enforced. 

Public  Spirit  Will  Dominate  the  Rich 

We  sometimes  hear  it  humorously  remarked 
that  no  person  in  New  England  can  die  respectable 
unless  he  has  left  in  his  will  some  gift  to  Harvard 
University.  Whenever  there  shall  be  a  real  loyalty 
to  the  public  interest  throughout  the  country,  such 
as  this  imputed  loyalty  to  Harvard  University,  we 
shall  find  that  the  use  of  great  fortunes  will 
turn  more  and  more  toward  the  promotion  of 
public  enterprises,  even  though  now  in  the 
United  States  the  distribution  of  large  sums  for 
the  endowment  of  public  institutions  is  most 
noteworthy.  What  is  of  far  greater  impor- 
tance, the  methods  of  accumulation  of  the  great 
fortunes  will  be  so  limited  to  those  which  are 
not  detrimental,  but  only  beneficial,  that  jeal- 
ousy of  the  rich  will  be  allayed,  since  we  shall 
[82] 


THE     USING 

feel  that  they  are  receiving  only  their  just  dues. 
I  do  not  look  ahead  to  the  attainment  of  this 
happy  result  within  any  short  period  of  time,  but 
I  think  that  we  may  see  clearly  that  a  ten- 
dency in  this  direction  is  already  noticeable.  The 
exposures  of  corrupt  methods  of  business  man- 
agement in  the  great  manufacturing  corporations, 
in  the  railroads,  in  the  insurance  companies,  have 
all  tended  to  awaken  the  public  conscience  and  to 
arouse  a  determination  to  prevent  such  practices 
in  the  future.  These  revelations  have  not  merely 
proved  a  surprise  to  many,  but  they  have  been  a 
quickener  of  the  public  conscience.  Business  men 
who  had  been  carrying  on  similar  practices  without 
any  thought  of  wrong-doing  or  of  any  injury  to  the 
public  until  the  startling  disclosures  had  set  them 
to  thinking,  are  now  themselves  revising  their  own 
methods  of  doing  business.  We  can  easily  see  that 
such  a  change  in  public  sentiment  is  certain  to 
result  in  a  change  in  laws  which  will  tend  on  the 
one  hand  to  prevent  by  fear  of  punishment  many 
evil  practices,  and  on  the  other,  to  stimulate  anew 
the  moral  sentiment  which  will  lead  to  the  volun- 
tary adoption  of  better  practices.  And  although 
[83] 


GREAT      FORTUNES 

we  must  expect  that  the  process  of  regeneration 
will  be  discouragingly  slow,  we  have  still  every 
reason  to  hope  and  to  believe  that  this  tendency 
will  continue  until  great  fortunes,  perhaps  fewer 
in  number  than  now  and  generally  less  in  amount, 
will  no  longer  be  a  public  menace,  but  a  public 
benefit. 

I  referred  earlier  to  the  uplifting  influence  of 
great  wealth  used  for  public  ends  in  ancient 
Athens,  as  it  gave  to  the  world  an  example  of 
culture  and  refinement;  but  a  still  more  potent 
influence  than  that  of  Athens  came  from  Jerusa- 
lem. More  important  than  the  spread  of  refine- 
ment and  art  and  literature  is  the  culture  of  purity, 
unselfishness,  righteousness.  While  under  just 
conditions  we  need  not  envy  the  concentration 
of  wealth  so  far  as  every-day  comfort,  refinement, 
justice  for  the  masses  are  concerned,  we  must  use 
every  effort  to  see  that  connected  therewith 
shall  go  the  right  ideals  regarding  the  methods 
that  may  be  used  in  the  accumulation  of 
wealth  and  the  unselfishness  of  the  use  to 
be  made  of  it.  We  must  encourage  still  more 
the  development  in  the  community  of  the 
[84] 


THE     USING 


ideals  of  justness  and  righteousness  which  will 
make  our  added  comforts  and  refining  luxuries 
tend  steadily  and  strongly  toward  the  moral  and 
spiritual  uplifting  of  mankind. 


THE   END 


THE   MCCLURE   PRESS,    NEW   YORK 


